Order Code RL31808
CRS Report for Congress
Received through the CRS Web
Appropriations for FY2004:
Transportation, Treasury, Postal Service,
Executive Office of the President, General
Government, and Related Agencies
Updated September 24, 2003
David Randall Peterman and John Frittelli
Coordinators
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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Appropriations are one part of a complex federal budget process that includes budget
resolutions, appropriations (regular, supplemental, and continuing) bills, rescissions, and
budget reconciliation bills. The process begins with the President’s budget request and is
bound by the rules of the House and Senate, the Congressional Budget and Impoundment
Control Act of 1974 (as amended), the Budget Enforcement Act of 1990, and current
program authorizations.
This report is a guide to one of the 13 regular appropriations bills that Congress considers
each year. It is designed to supplement the information provided by the Subcommittee on
Transportation, Treasury and Independent Agencies of the House Committee on
Appropriations the Subcommittee on Transportation, Treasury and General Government of
the Senate Committee on Appropriations. It summarizes the current legislative status of the
bill, its scope, major issues, funding levels, and related legislative activity. The report lists
the key CRS staff relevant to the issues covered and related CRS products.
This report is updated as soon as possible after major legislative developments, especially
following legislative action in the committees and on the floor of the House and Senate.
NOTE: A Web Version of this document with active links is
available to congressional staff at:
[http://www.crs.gov/products/appropriations/apppage.shtml].

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Appropriations for FY2004:
Transportation, Treasury, Postal Service, Executive
Office of the President, General Government, and
Related Agencies
Summary
This year Congress begins providing in a single bill appropriations for the
Departments of Transportation and the Treasury, the United States Postal Service, the
Executive Office of the President, and Related Agencies, as well as General
Government provisions.
On February 4, 2003, President Bush presented his FY2004 budget request to
Congress. It requested $85.9 billion. On September 9, the House passed H.R. 2989,
the FY2004 Transportation, Treasury and Independent Agencies Appropriations bill,
which provides $85.8 billion.
The Committee’s major change from the
Administration’s request was to recommend an additional $4.4 billion in highway
spending (another major change, the deletion of the $3.4 billion for grants-in-aid to
airports, was a procedural change; funding may be restored in conference). On
September 4, the Senate Appropriations Committee marked up its version of the bill
(S. 1589); the Committee recommended $90.0 billion, adding $4.5 billion in highway
funding to the Administration’s request.
Key issues in transportation appropriations include highway funding (both
Houses provide $4+ billion more than the Administration requested) and Amtrak
funding (the House provides $900 million, as requested by the Administration; the
Department of Transportation’s Inspector General says Amtrak cannot survive on
that amount).
Key issues in treasury and related agencies appropriations include Internal
Revenue Service efforts to enforce compliance with tax laws, particularly the earned
income tax credit, and the proposed pay increase for federal civilian employees (the
White House opposes while both Houses support a 4.1% pay raise for federal civilian
employees, in line with the military pay raise). Other key issues include two
provisions in the House bill that have drawn veto threats: a provision that would
prohibit the use of funds in the bill to enforce travel restrictions to Cuba and a
provision that would block the Administration’s plan to increase the outsourcing of
federal work by prohibiting the use of funds in the bill to enforce new federal
outsourcing rules.
With the end of the fiscal year approaching, and several appropriations bills still
being worked on, a Continuing Resolution is likely. This report will be updated as
warranted by events.

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Key Policy Staff
CRS
Area of Expertise
Name
Telephone
Division
Bob Kirk,
RSI
7-7769
Airport Improvement Program
John Fischer
RSI
7-7766
Amtrak
Randy Peterman
RSI
7-3267
Aviation Safety
Bart Elias
RSI
7-7771
E-Government
Harold Relyea
G&F
7-8679
Executive Office of the President
Barbara Schwemle
G&F
7-8655
Federal Aviation Administration
John Fischer
RSI
7-7766
Federal Child Care
Melinda Gish
DSP
7-4618
Federal Election Commission
Joseph Cantor
G&F
7-7876
Federal Employee Health Care Policy
Health Section
DSP
7-5863
Federal Employee Pension Policy
Patrick Purcell
DSP
7-7571
Federal Employee Workers’
Compensation (FECA)
Edward Rappaport
DSP
7-7740
Bob Kirk
RSI
7-7769
Federal Highway Administration
John Fischer
RSI
7-7766
Federal Railroad Administration
John Frittelli
RSI
7-7033
Federal Transit Administration
Randy Peterman
RSI
7-3267
General Provisions
Sharon Gressle
G&F
7-8677
General Services Administration
Stephanie Smith
G&F
7-8674
Highway, Railroad, & Vehicular Safety
Paul Rothberg
RSI
7-7012
Homeland Security
Sharon Gressle
G&F
7-8677
Independent Agencies
Sharon Gressle
G&F
7-8677
Internal Revenue Service
Gary Guenther
G&F
7-7742
National Archives
Harold Relyea
G&F
7-8679
Office of Government Ethics
Mildred Amer
G&F
7-8304
Office of Personnel Management
Barbara Schwemle
G&F
7-8655
Postal Service
Nye Stevens
G&F
7-0208
Presidential Salary
Sharon Gressle
G&F
7-8677
Procurement
Stephanie Smith
G&F
7-8674
Real Estate Brokerage Regulation
William Jackson
G&F
77834
Surface Transportation Board
John Frittelli
RSI
7-7033
Transportation Infrastructure Policy
John Fischer
RSI
7-7766
Treasury Department
Gary Guenther
G&F
7-7742
Division abbreviations:
DSP = Domestic Social Policy
G&F= Government & Finance
RSI = Resources, Science, and Industry Division.

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Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Legislative Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Data note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
FY2003 Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
FY2004 Budget Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Major Funding Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Title I: Transportation Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Federal Aviation Administration (FAA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Operations and Maintenance (O&M) . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Facilities and Equipment (F&E) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Research, Engineering, and Development (RE&D) . . . . . . . . . . . . . . . 7
Essential Air Service (EAS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Grants-in-Aid for Airports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Related AIP Reauthorization Issues . . . . . . . . . . . . . . . . . . . . . . . . 8
Federal Highway Administration (FHWA) . . . . . . . . . . . . . . . . . . . . . . . . . . 9
The Administration Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
The House Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
The Senate Appropriations Committee Recommendation . . . . . . . . . 10
The TEA-21 Funding Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Federal Motor Carrier Safety Administration (FMCSA) . . . . . . . . . . . . . . . 12
Administrative and Operations Expenses . . . . . . . . . . . . . . . . . . . . . . 12
Grants to States and Other Activities . . . . . . . . . . . . . . . . . . . . . . . . . . 12
National Highway Traffic Safety Administration (NHTSA) . . . . . . . . . . . . 13
Federal Railroad Administration (FRA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Railroad Safety and Research and Development . . . . . . . . . . . . . . . . . 15
Next Generation High-Speed Rail R&D . . . . . . . . . . . . . . . . . . . . . . . 16
Amtrak . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Federal Transit Administration (FTA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Restructuring the Capital Investment Grants and Loans Program . . . . 19
Eliminating the Bus & Bus Facilities Program . . . . . . . . . . . . . . . . . . 19
Proposed New Freedom Initiative . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Maritime Administration (MARAD) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Research and Special Programs Administration (RSPA) . . . . . . . . . . . . . . 22
Title II: Treasury Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Department of the Treasury Budget and Key Policy Issues . . . . . . . . . . . . . 23
Internal Revenue Service (IRS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Title III: Postal Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Title IV: Executive Office of the President (EOP) and Funds Appropriated to the
President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
EOP Offices Funded Through Treasury and General Government
Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

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Compensation of the President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
White House Office (WHO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Office of Homeland Security (OHS) . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Executive Residence (White House) Operation and Care . . . . . . . . . . 36
Special Assistance to the President (Office of the Vice President) . . . 37
Official Residence of the Vice President . . . . . . . . . . . . . . . . . . . . . . . 38
Council of Economic Advisers (CEA) . . . . . . . . . . . . . . . . . . . . . . . . 38
Office of Policy Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
National Security Council (NSC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Office of Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Office of Management and Budget (OMB) . . . . . . . . . . . . . . . . . . . . . 40
Office of National Drug Control Policy (ONDCP) . . . . . . . . . . . . . . . 41
The Counterdrug Technology Assessment Center (CTAC) . . . . . . . . 42
Federal Drug Control Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Other Federal Drug Control Programs (formerly The
Special Forfeiture Fund) . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Unanticipated Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Title V: Independent Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Federal Election Commission (FEC) . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Federal Labor Relations Authority (FLRA) . . . . . . . . . . . . . . . . . . . . . 48
General Services Administration (GSA) . . . . . . . . . . . . . . . . . . . . . . . 49
Federal Buildings Fund (FBF) . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Electronic Government Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
National Archives and Records Administration (NARA) . . . . . . . . . . 52
Merit Systems Protection Board (MSPB) . . . . . . . . . . . . . . . . . . . . . . 53
Office of Personnel Management (OPM) . . . . . . . . . . . . . . . . . . . . . . 54
Human Capital Performance Fund . . . . . . . . . . . . . . . . . . . . . . . . 57
Office of Special Counsel (OSC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Title VI: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Federal Personnel Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
General Schedule Pay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Federal Wage System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Senior Executive Service Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Human Capital Performance Fund . . . . . . . . . . . . . . . . . . . . . . . . 66
Members of Congress, Judges, and Other Officials . . . . . . . . . . . . . . 66
President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Federal Employees Workers’ Compensation Program (FECA) . . . . . 67
Competitive Sourcing of Federal Activities . . . . . . . . . . . . . . . . . . . . . . . . . 67
Cuba Sanctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
List of Transportation Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Appendix 1: The Transportation Appropriations Framework . . . . . . . . . . . . . . . 73
Transportation Equity Act for the 21st Century (TEA-21) . . . . . . . . . . . . . . 73
Wendell H. Ford Aviation Investment and Reform Act for the 21st Century
(FAIR21 or AIR21) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Appendix 2: Transportation Budget Terminology . . . . . . . . . . . . . . . . . . . . . . . . 75

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List of Figures
Figure 1. Federal Aviation Administration Appropriations . . . . . . . . . . . . . . . . . 8
Figure 2. Federal Highway Administration Appropriations . . . . . . . . . . . . . . . . 10
Figure 3. National Highway Traffic Safety Administration Appropriations . . . 14
Figure 4. Federal Railroad Administration Appropriations . . . . . . . . . . . . . . . . . 16
Figure 5. Federal Transit Administration Appropriations . . . . . . . . . . . . . . . . . 18
Figure 6. Maritime Administration Appropriations . . . . . . . . . . . . . . . . . . . . . . . 21
List of Tables
Table 1. Status of FY2004 Departments of Transportation and Treasury
and Independent Agencies Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Table 2. Transportation/Treasury Appropriations, by Title, FY2003-FY2004 . . . 3
Table 3: Funding Trends for Transportation/Treasury Appropriations,
FY1999-FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Table 4. Title I: Department of Transportation Appropriations . . . . . . . . . . . . . . 4
Table 5. FTA Appropriation, FY2003-FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Table 6. Title II: Department of the Treasury Appropriations . . . . . . . . . . . . . . . 23
Table 7. Title III: United States Postal Service Appropriations . . . . . . . . . . . . . . 30
Table 8. Title IV: Executive Office of the President (EOP) and Funds
Appropriated to the President Appropriations . . . . . . . . . . . . . . . . . . . . . . . 32
Table 9. Title V: Related Agencies Appropriations . . . . . . . . . . . . . . . . . . . . . . . 46
Table 10. General Services Administration Appropriations . . . . . . . . . . . . . . . . 48
Table 11. Government-wide General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 59

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Appropriations for FY2004: Transportation,
Treasury, Postal Service, Executive Office
of the President, General Government, and
Related Agencies
Most Recent Developments
On September 9, 2003, the House of Representatives passed H.R. 2989, the
FY2004 Transportation, Treasury and Independent Agencies Appropriation bill. The
bill provides $85.8 billion. Key financial differences from the Administration
request include an additional $4.4 billion in highway funding; another major
difference, the deletion of the $3.4 billion for grants-in-aid to airports, was the result
of a point of order against funding the administrative expenses of the program from
contract authority. Funding for the program is likely to be restored in conference.
On September 4, the Senate Committee on Appropriations marked up its version
of the FY2004 Transportation, Treasury and Independent Agencies Appropriation
bill.
The Committee recommended $90.0 billion, $4.1 billion more than the
Administration requested. The major financial change from the Administration
request was an additional $4.5 billion in highway funding.
Overview
Legislative Status
Table 1. Status of FY2004 Departments of Transportation and
Treasury and Independent Agencies Appropriations
Conference
Subcommittee
Report
Markup
House
House
Senate
Senate
Conf.
Public
Report Passage
Report
Passage Report
Approval
Law
House
Senate
House Senate
7/11/03 8/3/03
7/30/03
9/9/03
9/8/03
H.Rept.
381-39
S.Rept.
108-243
108-146
Data note.
Prior to FY2004, appropriations for the Department of
Transportation and the Department of the Treasury were in separate bills. Beginning
with the FY2004 budget, Congress is considering appropriations for the Department
of Transportation (DOT) and its related agencies, and the Department of the

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Treasury, the Postal Service, the Executive Office of the President, and General
Government provisions, in a single appropriations bill. This change is a result of the
creation of a new federal department, the Department of Homeland Security, and the
reorganization of the subcommittee structure of the House and Senate Committees
on Appropriations, creating new subcommittees for Homeland Security and
combining the former Transportation and Treasury subcommittees into one
committee.
As part of the creation of the Department of Homeland Security (DHS), the
United States Coast Guard and the Transportation Security Administration were
transferred from the Department of Transportation to DHS. Also, the Bureau of
Alcohol, Tobacco, and Firearms, the Customs Service, and the United States Secret
Service were transferred from the Department of the Treasury to DHS, and the Office
of Homeland Security was transferred from the Executive Office of the President to
DHS. Budget numbers for years prior to FY2004 have been adjusted for comparing
previous years’ appropriations and FY2004 requested funding.
The House divides its appropriation bill into six titles, the Senate division has
only five titles (the Senate includes the Postal Service under its Independent Agencies
title, while the House gives the Postal Service its own title). This report follows the
House practice.
FY2003 Appropriations
The FY2003 Consolidated Appropriations Resolution (P.L. 108-7) included a
0.65% across-the-board rescission which applied to most accounts in the Department
of Transportation and Department of the Treasury and General Government
appropriations. The FY2003 figures in this report reflect the rescission, and so differ
slightly from the figures in P.L. 108-7.
FY2004 Budget Request
The Administration’s FY2004 budget request for the Departments of
Transportation and Treasury, the Executive Office of the President, and Related
Agencies was $85.9 billion, $740 million below the final comparable FY2003
enacted figure (less than 1%). Table 2 shows the allocation of funding within the
overall request.

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CRS-3
Table 2. Transportation/Treasury Appropriations, by Title, FY2003-FY2004
(millions of dollars)
Final
FY2004
FY2004
FY2004
FY2004
Title
FY2003
House
Senate
Request
Enacted
Enacted
Passed
Reported
Title I: Department of Transportation
55,674
54,266
*54,940
58,947
Title II: Department of the Treasury
10,849
11,343
11,273
11,196
Title III: Postal Service
107
97
97
97
Title IV: Executive Office of the President
777
791
777
735
Title V: Related Agencies
19,151
19,555
19,021
19,180
Title VI: General Provisions
279
—
15
—
Total, Transportation/Treasury Appropriations
86,588
85,863
85,819
90,028
Source: House Committee on Appropriations, House Report 108-243, Table: Comparative Statement of Budget Authority, except
“Senate Reported” from Senate Committee on Appropriations, Senate Report 108-146, Table: Comparative Statement of Budget
Authority. “Total” is from “Net grand total budgetary resources” line in table and reflects scorekeeping adjustments.
Note: The Senate divides the budget differently from the House, putting the Postal Service into the “Related Agencies” (“Independent
Agencies” in the Senate report) Title.
*During House deliberations on H.R. 2989, funding for two programs was struck on points of order, reflecting a dispute over some
aspect of the way the funds were being provided, rather than the funding itself: FAA’s Grants-in-Aid to Airports program ($3.425
billion) and the Federal Motor Carrier Safety Administration’s Border Enforcement program ($47 million). This reduced total
transportation funding in the bill by those amounts, from $58.4 billion to $54. 9 billion, and thus total funding in the bill dropped
from $89.3 billion to $85.8 billion. Funding for those programs may be restored in conference.
Major Funding Trends
Table 3: Funding Trends for Transportation/Treasury
Appropriations, FY1999-FY2004
(billions of current dollars)
FY2004
Admin.
Department
FY1999
FY2000
FY2001 d
FY2002
FY2003 e
Request
Title I: Transportation a
43.9
46.2
51.9
57.4
55.7
54.3
Title II: Treasury b
9
9
9.9
10.5
10.8
11.3
Title III: Postal Service
0.1
0.1
0.1
0.7
0.1
0.1
Title IV: Executive
0.7
0.7
0.7
0.8
0.8
0.8
Office of the President
Title V: Related
14.6
15
15.8
16.8
19.2
19.6
Agencies c
Source: United States House of Representatives, Committee on Appropriations, Comparative Statement of
Budget Authority tables from fiscal years 1999 through 2004.
a. Figures for Department of Transportation appropriations for FY1999-FY2003 have been adjusted for
comparison with FY2004 figures by subtracting the United States Coast Guard, the Transportation
Security Administration, the National Transportation Safety Board, and the Architectural and
Transportation Barriers Compliance Board, and by adding the Maritime Administration.
b.
Figures for Department of the Treasury appropriations for FY1999-FY2003 have been adjusted for
comparison with FY2004 figures by subtracting the Bureau of Alcohol, Tobacco, and Firearms, the
Customs Service, the United States Secret Service, and the Law Enforcement Training Center.

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CRS-4
c. Figures for Related Agencies appropriations for FY1999-FY2003 have been adjusted by adding the National
Transportation Safety Board and the Architectural and Transportation Barriers Compliance Board.
d. FY2001 figures include 0.22% across-the-board rescission.
e. FY2003 figures include 0.65% across-the-board rescission.
Title I: Transportation Appropriations
Overview
The Administration’s FY2004 budget proposes a DOT budget of $54.3 billion
—2.6% below FY2003's comparable enacted level of $55.7 billion.1 The budget
request conformed to the basic outline of both the Transportation Equity Act for the
21st Century (TEA-21; P.L. 105-178) which authorizes spending on highways and
transit, and the aviation funding authorized in the Wendell Ford Aviation Investment
and Reform Act of the 21st Century (FAIR21 or AIR21; P.L. 106-181), although both
acts will expire before FY2004 begins (see Appendix 1 for more information on
these authorizing acts). However, the request did propose a few changes to the
highway and transit funding structure, in line with the Administration’s
reauthorization proposal; see the sections on the Federal Highway Administration
and Federal Transit Administration for details.
Table 4. Title I: Department of Transportation Appropriations
(in millions of dollars — totals may not add)
Final
FY2004
FY2004
Department or Agency
FY2004
FY2004
FY2003
House
Senate
(Selected Accounts)
Request
Enacted
Enacted a
Passed
Reported
Office of the Secretary of
Transportation
173
177
159
172
Essential Air Service b
52
50
63
52
Federal Aviation Administration
13,510
14,007
10,600
13,971
Operations (trust fund &
general fund)
7,023
7,591
7,532
7,536
Facilities & Equipment (F&E)
(trust fund)
2,942
2,916
2,900
2,916
Grant-in-aid Airports (AIP)
(trust fund) (limit. on oblig.)
3,378
3,400
—
3,400
Research, Engineering &
Development (trust fund)
147
100
108
119
Federal Highway Administration
32,417
30,225
34,579
34,768
(Limitation on Obligations)
31,593
29,294
33,385
33,843
(Exempt Obligations)
893
931
931
931
1 This report relies on figures from tables provided by the House and Senate Committees on
Appropriations. Because of differing treatment of offsets, rescissions, and the structure of
appropriations bills, the totals will at times vary from those provided by the Administration.
The total FY2004 budget number for DOT is not directly comparable to those of previous
years due to the transfer of the Coast Guard and Transportation Security Administration to
the Department of Homeland Security during FY2003, as well as other changes.

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CRS-5
Final
FY2004
FY2004
Department or Agency
FY2004
FY2004
FY2003
House
Senate
(Selected Accounts)
Request
Enacted
Enacted a
Passed
Reported
Additional funds
(trust fund)
—
—
400
Additional funds c
(general fund)
187
—
—
150
Federal Motor Carrier Safety
Administration
313
447
427
483
National Highway Traffic Safety
Administration d
434
665
435
449
Federal Railroad Administration j
1,261
1,089
1,087
1,568
Amtrak e
1,043
900
900
1,346
Federal Transit Administration
7,179
7,226
7,231
7,305
Formula Grants
(general fund)
763
—
768
768
Formula Grants (trust fund)
3,051
5,615
3,071
3,071
Capital Investment Grants.
(general fund)
603
1,214
599
628
Capital Investment Grants
(trust fund)
2,413
321
2,507
2,512
St. Lawrence Seaway Development
Corporation
14
14
15
14
Maritime Administration
230
219
219
228
Research and Special Programs
Administration f
105
118
111
110
Office of Inspector General
55
55
55
56
Surface Transportation Board
18
18
18
18
Total, Department of
Transportation g
55,674
54,266
*54,940
58,947
Note: Figures were taken from House Committee on Appropriations, House Report 108-243, Table: Comparative
Statement of Budget Authority, except “Senate Reported” from Senate Committee on Appropriations, Senate
Report 108-146, Table: Comparative Statement of Budget Authority. Because of differing treatment of offsets,
the totals will not always match the Administration’s totals. The figures within this table may differ slightly from
those in the text due to supplemental appropriations, rescissions, and other funding actions. Columns may not
add due to rounding or exclusion of smaller program line-items.
*During House deliberations on H.R. 2989, funding for two programs was struck on points of order, which
reflected a dispute over some aspect of the way the funds were being provided, rather than the funding itself:
FAA’s Grants-in-Aid to Airports program ($3.425 billion) and the Federal Motor Carrier Safety Administration’s
Border Enforcement program ($47 million). This reduced total transportation funding in the bill by those
amounts. Funding for these programs may be restored in conference.
a. These figures reflect the 0.65% across-the-board rescission included in P.L. 108-7.
b. These amounts are in addition to the $50 million annual authorization for the Essential Air Service program;
thus, the total FY2003 funding was $102 million ($50 million + $52 million).
c. For Appalachian Development Highway System ($187 million).
d. NHTSA’s FY2004 request includes $100 million transferred from FHWA; this funding was previously
provided through the FHWA but administered by NHTSA. Therefore, the difference between budgetary
resources available to NHTSA for FY2003 and its FY2004 request is $131 million, not $231 million.
e. In addition to Amtrak’s FY2003 appropriation, Congress postponed Amtrak’s repayment of a $100 million
loan from the DOT.
f. The figures do not reflect $14 million in permanent appropriations. Therefore, the total resources for RSPA
for FY2003 may be seen as $119 million, and the total request for FY2004 as $132 million.
g. Rescissions of unobligated previous years’ contract authority have been subtracted from this total. Because
rescissions of prior years’ contract authority have no impact on the budgetary resources available for the
current fiscal year, the total resources available could be seen as $55.9 billion for FY2003 enacted.

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CRS-6
Federal Aviation Administration (FAA)
[http://www.faa.gov/]
H.R. 2989 as passed by the House, would provide just over $14 billion for FAA
activities in FY2004. This is $21 million more than the Bush Administration
proposal and a $518 million increase over the FY2003 enacted level of $13.5 billion
(this amount reflects a 0.65% rescission to which some parts of the FAA budget were
subjected). The majority of the increased funding proposed by H.R. 2989 and the
Bush Administration submission would be used for Operations & Maintenance
(O&M) expenses. S. 1589 as approved by the Senate Committee on Appropriations
provides the FAA with a similar amount, $13.97 billion. With the exception of some
program adjustments there are essentially no major new initiatives in any of the
FY2004 legislative proposals.
The vast majority of FAA funding is provided from the Airport and Airway
Trust Fund. Only O&M funding uses a mix of trust fund and Treasury general fund
monies. In FY2002 a Treasury general fund contribution of $1.1 billion was
provided for O&M funding. The Administration proposed a general fund
contribution of almost $3.3 billion for FY2003.
Whereas the general fund
contribution for FY2002 was on the low side historically, the Administration was
trying to return to a higher contribution level. In this effort they were successful,
with both the House and the Senate agreeing ultimately on $3.4 billion. For FY2004
the House Appropriations Committee initially
suggested that $1.5 billion be
provided from the general funds. During Floor debate the bill was amended to raise
the general fund contribution to approximately $3.5 billion.
The Senate
Appropriations bill, however, currently provides general funds at the $1.5 billion
level. Historically, this funding split has been an important part of the annual FAA
budget debate. The rationale behind the general fund contribution has been that the
public at large realizes some benefit from aviation whether it uses the system or not.2
Operations and Maintenance (O&M). H.R. 2989 provides $7.5 billion for
FY2004 O&M spending. The Senate Appropriations bill also provides $7.5 billion.
These compare with an Administration request of almost $7.6 billion. Each proposal
represents a major increase over the $7.1 billion level for FY2003 agreed to in P.L.
108-7. The majority of funding in this category is for the salaries of FAA personnel
engaged in air traffic control, certification, and safety-related activities. Much of the
increased funding called for in the FY2004 request is for increased air traffic control
system costs and safety-related activities.
Facilities and Equipment (F&E). P.L. 108-7 provided $2.96 billion for
this activity. The FY2004 Administration request was essentially unchanged from
this level. The House bill, however, provides for a decrease of $61.6 million from the
FY2003 level, whereas the Senate Appropriations bill provides for a decrease of
2 General fund appropriations have varied substantially, both in dollar terms and as a
percentage of FAA appropriations as a whole, from year to year. Over the last 12 years the
share has ranged from 0% to 47%. See table 1 in CRS Report RS20177, Airport and Airway
Trust Fund Issues in the 106th Congress, by John W. Fischer.

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CRS-7
$45.6 million. The Senate Appropriations bill, however, transfers $100 million of
its appropriation to the Airport Improvement Program making the actual Senate bill
reduction from last year’s level significantly greater. F&E funding is used primarily
for capital investment in air traffic control and safety. There are no significant new
F&E spending initiatives in the House, Senate Appropriations, or Administration
proposals.
Research, Engineering, and Development (RE&D). H.R. 2989 proposes
spending of $108 million for this activity in FY2004. The Senate Appropriations
bill provides almost $119 million. These compare with an Administration suggested
funding level of $100 million. All of these proposals are well below the $148.5
million enacted in FY2003.
Essential Air Service (EAS). The EAS program is operated through the
Office of the Secretary of Transportation (OST), and receives its funding from
designated user fees collected from overflights of United States territory by foreign
aircraft. EAS has had an annual authorized funding level of $50 million for the last
several years. The overflight funding mechanism, however, has never provided this
much annual funding, so additional funding has been provided from other sources.
The EAS program continues to enjoy significant support in Congress. As a result,
$102 million was provided for this program in FY2003.
For FY2004 the Bush Administration is proposing $50 million in spending for
the program. Of this, $33 million is to come from overflight fees and the remaining
$17 million is to be provided by unspent prior year funding. In addition, the
Administration is proposing major changes in the operation of the EAS program by
requiring greater local financial support for EAS service and by changing the
eligibility of certain communities based on their proximity to airports with non-EAS
service.
The House bill provides EAS with $113 million in FY2004 funding. As
proposed by the House Appropriations Committee, $50 million would have come
from EAS’s standing authorization and an additional $63 million would have been
taken from the airport and airway trust fund.
In making its proposal the
Appropriations Committee assumed that the overflight fee mechanism would fail to
provide adequate funding for the program. During floor debate the House bill was
modified so that the additional $63 million is no longer taken from the trust fund.
The House bill does not include the Administration’s proposed structural changes but
does require that DOT ask each community receiving EAS assistance to report by
March 1, 2004 on how program coordination and funding could be improved. DOT
is to compile and provide this information to Congress.
The Senate Appropriations Committee proposal provides $102 million for the
program. Its bill is predicated on providing an existing level of service to all points
currently receiving EAS service. The bill does not include any of the structural
changes proposed by the Administration.

---

CRS-8
Figure 1. Federal Aviation Administration Appropriations
Grants-in-Aid for Airports. The Airport Improvement Program (AIP)
provides grants for airport development and planning. The Bush Administration
FY2004 budget proposal requested $3.4 billion for AIP, roughly the same as enacted
for FY2003.
The House Committee on Appropriations recommended $3.425 billion for AIP,
$25 million above the Administration’s proposal. The bill would have provided $20
million for the Small Community Air Service Program from AIP funds. The report
language for AIP discretionary grants directs that the FAA give priority to projects
at 171 listed airports, but does not set the grant amounts. During floor debate on the
bill the entire AIP provision was struck from the bill on a point of order.
Consequently, the House-passed bill, H.R. 2989, contains no funding for AIP.
The Senate-reported FY2004 appropriations bill (S. 1589; S.Rept. 108-146)
recommends $3.5 billion for AIP. This includes a $100 million transfer from the
facilities and equipment account. This transferred money is not subject to the $3.4
billion obligation limitation. The report language for AIP discretionary grants directs
the FAA to give priority to projects at 241 airports named in the report. The Senate
bill includes a prohibition against using AIP grants for airport changes or
improvements needed to install bulk explosive detection systems.

---

CRS-9
Related AIP Reauthorization Issues. AIP’s existing authorization expires
at the end of FY2003. If the program is not authorized by then it will go into
abeyance (existing projects could continue but new projects would not be funded).
The Bush Administration, as part of its FAA reauthorization proposal for FY2004-
FY2007, would hold AIP’s annual funding at the $3.4 billion level for the life of the
authorization. It would also restructure AIP to increase the program’s discretionary
funding from 34% to 46% of total program funding. This would require less
generous funding of the popular airport “entitlements” which are distributed by
formula. The conference report on FAA reauthorization (H.Rept. 108-240) would
authorize AIP at $3.4 billion for FY2004, $3.5 billion for FY2005, $3.6 billion for
FY2006, and $3.7 billion for FY2007.
Federal Highway Administration (FHWA)
[http://www.fhwa.dot.gov]
The FHWA budget provides funding for the Federal-Aid Highway Program
(FAHP), which is the umbrella term for nearly all the highway programs of the
agency.
The Administration Request. For FY2004, the President requested $30.2
billion for FHWA. This represented a decrease of $2.2 billion (-7%) from the
FY2003 appropriation of $32.4 billion. The proposed obligation limitation, which
supports most of the FAHP, was set at $29.3 billion, significantly less than the $31.6
billion enacted for FY2003. Funding for exempt programs (emergency relief and a
portion of minimum guarantee funding) was set at $931 million, up $38 million from
FY2003's $884 million.
The budget would continue FHWA’s major programs but also proposes some
changes, which reflect the Administration’s reauthorization proposal. A new $1.0
billion Infrastructure Performance and Maintenance initiative is one of the proposed
changes. The program’s funds would be distributed, according to the Surface
Transportation Program formula, for use on “ready-to-go” projects that address
congestion and improve infrastructure conditions. States would have to commit
these funds during the first six months of the fiscal year. Funds not obligated within
this time frame would be reallocated among the states.
On the revenue side, the budget proposes to redirect revenues from the 2.5
cents-per-gallon excise tax on gasohol, that are now deposited in the Treasury’s
general fund, to the highway trust fund. This change is expected to add roughly $600
million to highway trust fund revenues in FY2004. This change would require
legislation in addition to the appropriations bill. The budget assumes no revenue
aligned budget authority (RABA) adjustments for FY2004.
The House Bill. On July 30, 2003, the House Committee on Appropriations
reported out a bill (H.R. 2989; H.Rept. 108-243) recommending a total of $34.6
billion for FHWA. This would be $2.2 billion over the FY2003 enacted level and
$4.4 billion above the President’s request. The recommended obligation limitation
was set at $33.4 billion, $1.8 billion above the FY2003 level and $4.1 billion above
the President’s request. The overall total includes exempt obligations of $931

---

CRS-10
million (the same as the requested amount) as well as an additional $400 million.
This $400 million (available until expended and not subject to the obligation
limitation) is to be distributed under the terms and conditions of RABA (23 U.S.C.
Section 110) but only after $133.5 million is set aside for the congressional earmarks
listed in the bill’s report language. As has been common in recent years, the federal-
aid highway discretionary programs are also heavily earmarked.
Figure 2. Federal Highway Administration Appropriations
The bill included some provisions that were points of contention during debate
on the House floor. Section 114 of the bill would have eliminated the mandatory
10% Surface Transportation Program (STP) set-aside for transportation
enhancements (TE) but the section was eliminated by amendment. Some other
highway provisions were dropped from H.R. 2989 as points of order against them
were sustained, including: Section 110, which concerned distribution of the
obligation limitation and the rescission provision that rescinded $137 million in
unobligated balances apportioned in prior years under the core formula programs to
the states. The elimination of this recision increased the House-passed total budget
for FHWA to $34.7 billion.
The Senate Appropriations Committee Recommendation.
On
September 8, 2003, the Senate Appropriations Committee reported out a bill (S1589;
S.Rept. 108-146) recommending a total of $34.8 billion for FHWA for FY2003. At

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CRS-11
$33.8 billion, the recommended obligation limitation is nearly $500 million more
than the House-passed bill. The $931 million for exempt obligations is the same as
in the House bill. As is true with the House bill, the discretionary programs have
been heavily earmarked. The bill also directs that $175 million under the limitation
on administrative expenses be made available for surface transportation projects
earmarked in the report language of the bill.
The TEA-21 Funding Framework. Authorizing legislation for surface
transportation programs, the Transportation Equity Act for the 21st Century (TEA-21)
expires at the end of FY2003. The new authorization, which may or may not be
enacted by the start of the fiscal year, is expected to at least retain a large part of the
existing program funding framework.
TEA-21 created the largest surface
transportation program in U.S. history. For the most part, however, it did not create
new programs. Rather, it continued most of the highway and transit programs that
originated in its immediate predecessor legislation, the Intermodal Surface
Transportation Efficiency Act of 1991 (ISTEA, P.L. 102-240).
There are several sets of highway programs within FHWA. Most of the funding
is reserved for the major federal aid highway programs, which can be thought of as
the core programs. These programs are: National Highway System (NHS), Interstate
Maintenance (IM), Surface Transportation Program (STP), Bridge Replacement and
Rehabilitation (BRR), and Congestion Mitigation and Air Quality Improvement
(CMAQ). All of these programs are subject to apportionment on an annual basis by
formula and are not subject to program-by-program appropriation.
There is a second category of highway funding. This so called “exempt”
category consists of two elements: an additional annual authorization of minimum
guarantee funding ($639 million per fiscal year) and emergency relief ($100 million
per fiscal year). These funds are not subject to the annual limitation on obligations.
There is a further set of programs, known as the “allocated” programs. These
programs are under the direct control of FHA or other governmental entities. These
programs include: the Federal Lands Highway Program, High Priority Projects
(former demonstration project category), Appalachian Development Highway System
roads, the National Corridor Planning and Border Infrastructure Program, and several
other small programs.
At this point it appears that a long-term authorization for this program will not
occur before spending authority for the program expires on October 1, 2003.
Congress is currently considering extension legislation that will enable the program
to continue to operate into next year (both 5- and 6-month extension legislation is
under consideration).

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CRS-12
Federal Motor Carrier Safety Administration (FMCSA)
[http://www.fmcsa.dot.gov/]
The FMCSA was created by the Motor Carrier Safety Improvement Act of 1999
(MCSIA), P.L. 106-159.3 This agency became operational on January 1, 2000, and
assumed almost all of the responsibilities and personnel of DOT’s Office of Motor
Carrier Safety.4
FMCSA issues and enforces the federal motor carrier safety
regulations, which govern the operation and maintenance of interstate commercial
truck and bus operations and specify requirements for commercial drivers. FMCSA
also administers several grants and programs to help states conduct various truck and
bus safety activities. Together with the states, FMCSA conducts inspections of
Mexican-domiciled commercial drivers and vehicles entering the United States,
advances Intelligent Transportation Systems for commercial operations, and reviews
carriers transporting high hazard materials. Most of the funds used to conduct
FMCSA activities are derived from the federal highway trust fund.
The FY2004 Administration request for the FMCSA is $447 million. This is an
increase of almost $134 million (43%) over the FY2003 appropriation of $313.1
million. The House bill includes $426.8 million for FMCSA’s appropriation, and the
Senate Appropriations Committee recommended $483 million.
The FMCSA
appropriation historically consists of two primary components:
FMCSA
administrative and operations expenses; and financial assistance to the states for the
conduct of various truck and bus safety programs, including state border enforcement
activities.
Administrative and Operations Expenses. The President’s budget
request for FMCSA’s administrative and operations expenses in FY2004 is $224
million (up from $124 million in FY03), including funds for research and technology
(R&T) and regulatory development. The House approved $236.8 million, and the
Senate Appropriations Committee recommended $246 million.
Some of the
activities that would be funded include: enforcement to reduce the number of unsafe
carriers and drivers; outreach efforts to help educate the motoring public on how to
share the road with commercial vehicles; and the establishment of a medical review
board to assist FMCSA.
Grants to States and Other Activities. The Administration’s FY2004
request for these activities is $223 million; the House approved $190 million and the
Senate Appropriations Committee recommended $237 million. These funds are used
primarily to pay for the Motor Carrier Safety Assistance Program (MCSAP), which
3 During various hearings held in the first session of the 106th Congress, a number of
organizations, including DOT’s Inspector General, the General Accounting Office, and
many industry associations raised a variety of concerns regarding the effectiveness of the
federal truck and bus safety program. In response to these concerns, Congress created the
FMCSA.
4 DOT’s Office of Motor Carrier Safety, which operated from October 9 through December
31, 1999, replaced the Office of Motor Carriers of the Federal Highway Administration of
the DOT.

---

CRS-13
provides grants to states to help them enforce commercial vehicle safety and
hazardous materials transportation regulations. MCSAP grants cover up to 80% of
the costs of a state’s truck and bus safety program. Some 10,000 state and local law-
enforcement officers conduct more than 2.6 million roadside inspections of trucks
and buses annually under the program. The Senate Appropriations Committee
recommendation included an additional $47 million for construction of border
inspection stations for trucks.
National Highway Traffic Safety Administration (NHTSA)
[http://www.nhtsa.dot.gov/]
NHTSA supports behavioral (primarily driver and pedestrian actions) and
vehicle (primarily crash worthiness and avoidance) programs that are intended to
improve traffic safety. More specifically, NHTSA seeks to reduce impaired driving,
increase occupant protection, improve police traffic services, enhance emergency
medical responses to crashes, ensure compliance with its various vehicle safety
regulations, and track and deal with emerging vehicle safety problems. NHTSA also
provides grants to the states for the implementation of various highway traffic safety
programs.
For FY2004, $665 million is requested by the Administration to carry out the
NHTSA mission. This Administration request reflects an increase of $6 million
above the FY2003 program level and the addition of funding previously allocated to
the Federal Highway Administration for safety belt use and impaired-driving law
incentive programs.5 Of the total amount requested by the Administration for
FY2004, $447 million is designated to support traffic safety incentive and
performance grants to states, primarily to encourage occupant protection measures
and reduce impaired driving.
The FY2004 Administration request also includes $218 million for NHTSA’s
own operations and research activities to reduce highway fatalities and prevent
injuries. Included in the Administration’s request is funding for these four major
areas: research and analysis (e.g., collection of crash statistics and research on
vehicle performance and occupant damage during these crashes), highway safety
programs (e.g., developing improved countermeasures to combat impaired driving),
safety assurance (e.g., testing of vehicles to ensure compliance with federal motor
vehicle safety standards and maintaining a legislatively required database to track
vehicle defects), and safety performance standards (e.g, conducting crash avoidance
and crash-worthiness testing, and evaluating child safety seats).
The House
Appropriations Committee recommended and the House approved $434.8 million
for NHTSA, including $225 million for highway traffic safety grants and $206.2
million for operations and research.
The Senate Appropriations Committee
5 http://www.dot.gov/bib2004/nhtsa.html. According to DOT, total funds requested for
NHTSA for FY2004: “Includes $222 million of TEA-21 resources for the Sections 157 and
163 grant programs formerly appropriated to FHWA. NHTSA has always administered
these funds; therefore, the budget proposes that the funding be appropriated directly to
NHTSA.”

---

CRS-14
recommended $448.7 million for NHTSA, including $225 million for highway traffic
safety grants and $220.1 million for operations and research.6
Figure 3. National Highway Traffic Safety Administration
Appropriations
Federal Railroad Administration (FRA)
[http://www.fra.dot.gov]
For FY2004, the Administration requested $1.09 billion in funding for the FRA.
Most of this amount is for Amtrak. The Administration requested $900 million for
Amtrak, $150 million less than provided in FY2003 and $379 million more than the
President requested in FY2003. Of the $900 million requested, $671 million is for
operating costs and $229 million is for infrastructure costs. The House agreed to
$900 million for Amtrak. The Senate Committee on Appropriations recommended
$1.346 billion for Amtrak.
6 Excluding funds for the National Driver Register.

---

CRS-15
The Administration requested $131 million for railroad safety and operations,
which is $14 million more than provided in FY2003 and $13 million more than the
President requested for FY2003. The House agreed to $131 million; the Senate
Committee on Appropriations also recommended $131 million. For railroad research
and development, the President requested $35 million, which is $6 million more than
funding for FY2003. The House agreed to $28 million; the Senate Committee on
Appropriations recommended $34 million. For next generation high-speed rail, the
President requested $23 million, $7 million less than last year; the House agreed to
$28 million; the Senate Committee on Appropriations recommended $29 million.
Although most of the debate involving the FRA budget centers on Amtrak,
agency safety activities (which receive more detailed treatment following this
section), Next Generation High-Speed Rail, and how states might obtain additional
funds for high-speed rail initiatives are also issues.
Railroad Safety and Research and Development. The FRA is the
primary federal agency that promotes and regulates railroad safety. Increased railroad
traffic volume and density make equipment, employees, and operations more
vulnerable to adverse safety impacts. The Administration proposes $131.2 million
in FY2004 for FRA’s safety program and related administrative and operating
activities. This represents about a 13% increase over the $116.6 million provided in
the FY2003 DOT appropriations for rail safety and operations.
The House
Committee on Appropriations recommended and the House approved $130.9 million,
and the Senate Committee recommended $130.8 million.
Most of the funds
appropriated are used to pay for salaries as well as associated travel and training
expenses for FRA’s field and headquarters staff and to pay for information systems
monitoring the safety performance of the rail industry.7 The funds requested support
FRA’s goals of reducing rail accidents and incidents, reducing grade-crossing
accidents, and contributing to the avoidance of serious hazardous materials incidents.
The railroad safety statute was last reauthorized in 1994. Funding authority for
the program expired at the end of FY1998. FRA’s safety program continues using the
authorities specified in existing federal railroad safety law and funds provided by
annual appropriations. Though hearings have been held since 1994, the deliberations
have not resulted in agreement on funding for FRA’s regulatory and safety
compliance activities or change to any of the existing authorities used by FRA to
promote railroad safety. A reauthorization statute changing the scope and nature of
FRA’s safety activities would most likely affect budgets after FY2004.
To improve its safety regulations and industry practices, the FRA conducts
research and development (R&D) on an array of topics, including railroad employee
fatigue, technologies to control train movements, and track dynamics. In reports
7 The funds also are used to conduct a variety of initiatives, including the Safety Assurance
and Compliance Program (SACP), the Railroad Safety Advisory Committee (RSAC), and
field inspections. SACP involves numerous partnerships forged by railroad management,
FRA personnel, and labor to improve safety and compliance with federal railroad safety
regulations. RSAC uses a consensus-based process involving hundreds of experts who work
together to formulate recommendations on new or revised safety regulations for FRA’s
consideration.

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CRS-16
accompanying House and Senate transportation appropriation bills and in annual
conference reports, the appropriations committees historically have allocated FRA’s
R&D funds among various research categories pertaining to safety. The FY2003
DOT appropriation provided $29.1 million for the R&D program. For FY2004, the
Administration requests $35 million for these activities. The House Committee
recommended and the House approved $28.2 million, and the Senate Committee
recommended $34.2 million.
Figure 4. Federal Railroad Administration Appropriations
Next Generation High-Speed Rail R&D. This program supports work on
high-speed train control systems, track and structures technology, corridor planning,
grade crossing hazard mitigation, and high-speed non-electric locomotives. The
Administration requested $23.2 for this program in FY2004; this is $7.05 million
(23%) less than the FY2003 appropriation of $30.25 million. The House agreed to
$28.3 million. The difference is largely the House’s support for establishing the
compliance of diesel multiple units (a form of passenger rail car with its own engine
which is used in other countries but is not currently used in this country) with FRA
passenger safety regulations.
The Senate Committee on Appropriations
recommended $29.3 million. The difference is largely the Committee’s support for
additional high-speed corridor planning ($5 million for Florida’s high-speed corridor,
$2.5 million for a few others) and for maglev ($5 million for 4 maglev projects).

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CRS-17
Amtrak
[http://www.amtrak.com]
The President requested $900 million for Amtrak for FY2004; this is $150
million below Amtrak’s FY2003 appropriation of $1,050 million8 and $900 million
less than the $1.8 billion Amtrak has requested for FY2004. Amtrak has said that it
cannot survive FY2004 on $900 million. The House agreed to $900 million, similar
to the Administration request. It also added a provision allowing states to apply to
FHWA to transfer a portion of their allocation of an appropriation of $267 million
from the Highway Trust Account to Amtrak.9
The Senate Committee on
Appropriations recommended $1.346 billion for Amtrak, and extended to all Amtrak
routes the requirement (begun for FY2003) that Amtrak’s long-distance routes be
funded through the grant request process.
In a change of policy, Congress stipulated (in P.L. 108-7) that Amtrak’s FY2003
appropriation would not go directly to the corporation, but to the Secretary of
Transportation, who will provide funding to Amtrak quarterly through the grant-
making process. Congress also imposed several other requirements on Amtrak which
have the effect of reducing Amtrak’s discretion with its federal funding. Among
these was a requirement that Amtrak submit a 5-year business plan to Congress,
which it did on April 25, 2003. In this plan, Amtrak requests average annual federal
support of $1.6 billion for FY2004-FY2008 to maintain the current network and
begin to address the $5-6 billion in backlogged maintenance needs. The plan does
not propose expansion of the existing rail network.
Amtrak’s authorization expired at the end of FY2002; Congress is considering
Amtrak reauthorization.
Two bills have come out of committees that would
reauthorize Amtrak in its current configuration: the House Transportation and
Infrastructure Committee has reported out H.R. 2572 that would authorize Amtrak
at $2 billion annually for three years, and the Senate Commerce, Science, and
Transportation Committee has approved a surface transportation safety bill, which
has not yet been filed, that includes an amendment authorizing $2 billion annually
for Amtrak for six years. The Administration has submitted a plan for restructuring
Amtrak and passenger rail service (S. 1501) which would shift much of the
responsibility for passenger rail service to the states. Sen. Hutchinson and others
have submitted a plan for restructuring Amtrak and passenger rail service (S. 1505)
that would transfer responsibility for planning and implementing passenger rail
service to the federal government, authorize $2 billion annually for 6 years for
Amtrak, and authorize $48 billion in bonds to finance capital improvements to the
nation’s passenger rail system.
See CRS Report RL31743, Amtrak Issues in the
108th Congress, for further information.
8 For FY2003, Congress also deferred Amtrak’s repayment of a $100 million loan to the
DOT.
9 The provision is in the House Committee on Appropriations report (p. 72), not the bill.

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CRS-18
Federal Transit Administration (FTA)
[http://www.fta.dot.gov/]
President Bush’s FY2004 budget request for FTA is $7.226 billion, virtually the
same level as FTA’s FY2003 appropriation (FTA’s FY2003 $7.226 billion final
appropriation was reduced to $7.179 billion after the 0.65% rescission).10 The
Administration’s request also proposes changes to FTA’s program structure,
reflecting the Administration’s reauthorization proposal (the proposed changes are
described below). The House agreed to $7.231 billion; the Senate Committee on
Appropriations recommended $7.305 billion.
Since the Administration’s
reauthorization proposal has not been approved, the proposed program changes are
not reflected in the FTA appropriations.
Figure 5. Federal Transit Administration Appropriations
Table 5 presents the Administration request (and Congressional action) as it
applies to the existing program structure. The Administration’s proposed program
changes include the following:
10 These figures for FTA do not include any projections to account for possible flexible
funding transfers from FHWA to FTA. In FY2002 such transfers amounted to $1.1 billion.

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CRS-19
Restructuring the Capital Investment Grants and Loans Program.
This program consists of three component programs: New Starts, the Fixed
Guideway Modernization formula program, and the Bus and Bus Facilities
discretionary grant program.
The Administration request renames the Capital
Investment Grants and Loans Program “Major Capital Investment Grants,” eliminates
the Bus and Bus Facilities program, groups the Fixed Guideway Modernization
program with other formula programs, and groups funding for metropolitan and
statewide planning under this newly renamed program. Thus, after these changes the
program’s funding would support only New Starts and a portion of metropolitan and
statewide planning spending. In addition, the budget proposes that 80% of the
funding for the “Major Capital Investment Grants” program would come from
General Fund appropriations and 20% from the Mass Transit Account of the
Highway Trust Fund; currently, 80% of the funding for the Capital Investment Grants
and Loans Program comes from the Mass Transit Account, and 20% from General
Fund appropriations.
Eliminating the Bus & Bus Facilities Program. The Administration
requests no funding for this program; funds previously allocated to this discretionary
program ($607 million in FY2003) are proposed to be divided among the Urbanized
Areas Formula Program, the Non-Urbanized Areas Formula Program, and the New
Starts program, in accordance with the Administration’s reauthorization proposal.
Buses can be purchased under all three of these programs. The Bus and Bus
Facilities Program is a discretionary grant program and was completely earmarked
in FY2003. The Administration’s proposal would eliminate bus earmarks and
distribute bus and bus facilities funds through two formula programs and the New
Starts program.
Proposed New Freedom Initiative. The Administration’s request proposes
to create a new formula program, the New Freedom Initiative, which seeks to use
alternative methods to promote access to transportation for persons with disabilities
(this program was also proposed in FY2003, but was not supported by Congress).
The President’s budget requests $145 million for this program in FY2004. Neither
the House nor the Senate have supported funding for this program for FY2004.
Table 5. FTA Appropriation, FY2003-FY2004
(millions of dollars)
FY2004
FY2004
FY2003
FY2004
FY2004
Program
House
Senate
Enacted
Request
Conference
Passed
Reported
Urbanized Areas Formula Program
(Section 5307)
3,407
3,521
3,429
3,429
Capital Investment Grants & Loans
Program (Section 5309) Total
3,016
2,729
3,107
3,140
New Starts Program
1,207
1,515
1,214
1,318
Fixed Guideway
Modernization Program
1,207
1,214
1,214
1,214
Bus Discretionary Program
603
—
678
607
Non-Urbanized Areas Formula
Program (Section 5311)
237
359
239
239

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CRS-20
FY2004
FY2004
FY2003
FY2004
FY2004
Program
House
Senate
Enacted
Request
Conference
Passed
Reported
Job Access & Reverse Commute
Program
149
—
85
125
Elderly & Individuals with
Disabilities Formula Program
(Section 5310)
90
87
91
91
Rural Transportation Accessibility
Incentive Program (Section 3038),
also known as the Over-the-Road
Bus Accessibility program
7
7
7
7
Planning & Research
121
122
122
Other
145
108
151
152
New Freedom Initiative
—
145
—
—
FTA Total
7,179
7,226
7,231
7,305
Note: numbers may not add due to rounding.
Source: The Budget of the United States Government, Fiscal Year 2004, Appendix: “Federal Transit
Administration,” p. 740-747, with reference to House and Senate Committees on Appropriations, House Report
108-243 and Senate Report 108-146, “Federal Transit Administration” sections and Tables: Comparative
Statement of Budget Authority.
For information on FTA’s programs and funding structure, see CRS Report
RL31854, Transit Program Reauthorization in the 108th Congress.
Maritime Administration (MARAD)
[http://www.marad.dot.gov]
MARAD’s mission is to promote the development and maintenance of a U.S.
merchant marine capable of carrying the Nation’s waterborne domestic commerce,
a portion of its waterborne foreign commerce, and to serve as a naval and military
auxiliary in time of war. MARAD administers programs that benefit U.S. vessel
owners, shipyards, and ship crews. For FY2004, the President requested a total of
$219 million for MARAD, which is about $12 million more than the President
requested, and about $11 million less than Congress appropriated, for FY2003. The
House passed bill provides $218.6 million for MARAD for FY2004 while the Senate
Appropriations Committee recommended $227.6 million.
Much of the discussion concerning MARAD’s budget focuses on the Maritime
Guaranteed Loan Program (the “Title XI” program).
This program provides
guaranteed loans for purchasing ships from U.S. shipyards and for the modernization
of U.S. shipyards. The purpose of the program is to promote the growth and
modernization of U.S. shipyards. Consistent with its budget requests in prior years,
the Administration has requested no funds for additional loans in FY2004, calling the
program a “corporate subsidy.” The Administration has, however, requested $4.5
million for the administration of existing loans. For FY2003, in the Consolidated
Appropriations Resolution (P.L. 108-7), Congress initially provided no funds for the
program other than $4 million for administrative expenses. However, in the Wartime
Supplemental Appropriations bill (P.L. 108-11), Congress provided $25 million for

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CRS-21
the program. The House bill also provides no funds for additional Title XI loans in
FY2004 and directs MARAD to use the $25 million provided in P.L. 108-11 to cover
the estimated $4.5 million in administrative costs. The Senate Appropriations
Committee recommended no funds for additional loans but provided $4.5 million for
administrative expenses.
Figure 6. Maritime Administration Appropriations
The DOT Inspector General recently issued a report on the Title XI program
(CR-2003-031, March 27, 2003) calling on MARAD to review loan applications
more effectively, exercise more rigorous financial oversight of borrowers, and use
an external financial advisor in reviewing loan applications. The IG’s investigation
was prompted by the bankruptcy of American Classic Voyages, leaving MARAD
with $367 million in bad loans for the construction of two cruise ships. At a June 5,
2003 Senate Commerce Committee hearing on the Title XI program, the General
Accounting Office also identified weaknesses in the program and made
recommendations for improving the financial oversight of the program (GAO-03-
728T).
For operations and training, the Administration requested $104.4 million, about
$12 million more than Congress appropriated in FY2003. Of this amount, $52.9
million is requested for the U.S. Merchant Marine Academy in Kings Point, New
York; $9.5 million for state maritime academies; and $42 million for the operations
of MARAD. The House passed bill provides $105.9 million for operations and
training and the Senate Appropriations Committee recommended $106 million. For

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CRS-22
the Maritime Security Program (MSP), the Administration requested $98.7 million,
virtually the same amount as Congress provided last year. The House passed bill and
the Senate Appropriations Committee agrees with the President’s request. MSP is
a fleet of 47 privately-owned U.S. flag commercial vessels engaged in international
trade that are available to support the Department of Defense in a national
emergency.
For the disposal of obsolete vessels in the National Defense Reserve Fleet
(NDRF), the Administration requested $11.4 million, about the same amount
Congress appropriated in FY2003. There are over 130 vessels in the NDRF that are
awaiting disposal because of their age. These vessels have raised environmental
concerns due to the presence of asbestos and other hazardous substances. MARAD
has until 2006 to dispose of these surplus ships, most of which are located on the
James River in Virginia and in Suisan Bay, California. The House passed bill
provides $14 million and the Senate Appropriations Committee recommended $18.4
million for the disposal of these ships.
Research and Special Programs Administration (RSPA)
[http://www.rspa.dot.gov]
The Research and Special Programs Administration (RSPA) includes a variety
of operating entities, including the Office of Pipeline Safety and the Office of
Hazardous Materials Safety. RSPA also conducts a multimodal research program,
helps coordinate and plan for transportation research and technology transfer
activities, sponsors educational activities to promote innovative transportation, and
manages
DOT’s
transportation-related emergency response and recovery
responsibilities.
For FY2004, the Administration requests a budget of $118 million for RSPA11;
most of this funding would be allocated to activities that promote transportation
safety. For RSPA’s pipeline transportation safety program, $67 million is proposed
by the Administration (an increase of $3 million over the FY2003 appropriation); for
the hazardous materials transportation safety program, $25 million is requested (an
increase of $2 million over the FY2003 appropriation). Much of the additional
funding requested is intended to enhance RSPA’s ability to ensure that the federal
hazardous materials transportation pipeline safety regulations are complied with and
to assist DOT in participating in the safety oversight of containment systems that will
be used to ship spent nuclear fuel and high-level radioactive wastes. The House
Appropriations Committee recommended and the House approved $111.3 million
for RSPA in FY2004, including $23.6 million for hazardous materials transportation
safety, and $64.1 million for pipeline safety. The Senate Appropriations Committee
recommended $110.3 million for RSPA in FY2004, including $22.8 million for
hazardous materials transportation safety, and $67.6 million for pipeline safety.
11 RSPA also receives $14 million annually for emergency preparedness grants, so its total
request could be seen as $132 million.

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CRS-23
Title II: Treasury Appropriations
Table 6. Title II: Department of the Treasury Appropriations
(in millions of dollars)
FY2004
FY2004
FY2003
FY2004
FY2004
Program or Account
House
Senate
Enacted
Request
Enacted
Passed
Reported
Departmental Offices
158
167
176
175
Department-wide Systems and
Capital Investments
37
37
37
37
Office of Inspector General
11
—
13
13
Treasury Inspector General for
Tax Administration
124
—
128
128
Treasury Inspector General
—
135
—
—
Air Transportation Stabilization
Program
6
3
3
3
Treasury Building Repair and
Restoration
29
25
25
25
Financial Crimes Enforcement
Network
51
58
58
58
Interagency Crime and Drug
Enforcement
107
—
—
—
Financial Management Service
221
229
229
229
Alcohol and Tobacco Tax and
Trade Bureau
79
80
80
80
Bureau of the Public Debt
189
174
174
174
Internal Revenue Service, Total
9,835
10,437
10,352
10,276
Processing, Assistance
and Management
3,930
4,075
4,038
4,048
Tax Law Enforcement
3,705
3,977
4,221
4,173
Information Systems
1,622
1,670
1,629
1,591
Business Systems
Modernization
364
429
429
429
Health Insurance Tax
Credit Administration
70
35
35
35
Total,
Department of the Treasury
10,840
11,343
11,273
11,196
Source: United States House of Representative, Committee on Appropriations, House Report 108-243, Table:
Comparative Statement of Budget Authority, except Senate figures from Senate Committee on Appropriations,
Senate Report 108-146, Table: Comparative Statement of Budget Authority.
Department of the Treasury Budget and Key Policy Issues
In recent decades, the Treasury Department has performed four basic functions:
(1) formulating, recommending, and implementing economic, financial, tax, and
fiscal policies; (2) serving as the financial agent for the federal government; (3)
enforcing federal financial, tax, counterfeiting, customs, tobacco, alcoholic beverage,
and gun laws; and (4) producing postage stamps, currency, and coinage. With the
creation of the Department of Homeland Security (DHS) late in 2002 and its

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CRS-24
assumption in March 2003 of the authorities transferred to it by executive order, this
functional profile has changed significantly. While Treasury still serves as one of the
federal government’s principal economic policymakers and its financial manager,
revenue collector, and producer of currency, coinage, and stamps, its role in law
enforcement is now much more limited.
At its most basic level of organization, the Department consists of departmental
offices and operating bureaus. The departmental offices are responsible for the
formulation and implementation of policy and the management of the Department as
a whole, while the operating bureaus carry out specific duties assigned to the
Department. The bureaus typically account for more than 95% of the Department’s
employment and funding. With one notable exception, the bureaus can be divided
into those having financial responsibilities and those engaged in law enforcement.
In recent decades, financial responsibilities have been handled by the Comptroller of
the Currency, U.S. Mint, Bureau of Engraving and Printing, Financial Management
Service, Bureau of Public Debt, Community Development Financial Institutions
Fund, and Office of Thrift Supervision; and law enforcement has been done by the
Bureau of Alcohol, Tobacco, and Firearms (BATF), U.S. Secret Service, Federal Law
Enforcement Training Center, U.S. Customs Service, Financial Crimes Enforcement
Network (FinCen), and Treasury Forfeiture Fund. The exception to this dichotomy
is the Internal Revenue Service (IRS), which performs both financial duties and law
enforcement through its administration of federal tax laws.
The advent of DHS has greatly diminished the Department’s involvement in law
enforcement. Under the law establishing DHS (P.L. 107-296), the Secret Service,
Customs Service, and Federal Law Enforcement Training Center were transferred
from the Treasury Department to DHS, while the Treasury Forfeiture Fund and many
functions of BATF were transferred to the Justice Department (DOJ). On January
24, 2003, the Treasury Department announced the establishment of a new bureau to
administer laws related to the use of alcohol and tobacco and to implement
regulations formerly handled by BATF: the Alcohol and Tobacco Tax and Trade
Bureau. Its main duties include collecting alcohol and tobacco excise taxes and
classifying those products for tax purposes.
In its budget request for FY2004, the Bush Administration is seeking $11.408
billion in funding for the Treasury Department.12 This amount is 3.5% greater than
the amount enacted for FY2003 ($11.018 billion), after adjusting for the transfer of
functions to DHS and the Justice Department. According to budget documents, the
Administration’s top priorities for Treasury operations in the coming fiscal year are
to bolster IRS’s efforts to monitor and enforce compliance with tax laws, improve the
Department’s overall efficiency by further streamlining operations, and elevate the
Department’s role in federal efforts to combat money laundering and disrupt financial
12 The Administration’s budget request for the Treasury Department in FY2004 is $65
million greater than the requested amounts being considered by the House and Senate
appropriations committees. This difference reflects funding for two programs administered
by Treasury but funded through separate appropriations accounts:
the Community
Development Financial Institutions Fund (CDFI) and international technical assistance.
Funding for the former is covered under appropriations for the Department of Housing and
Urban Development, and for the latter under appropriations for foreign operations.

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CRS-25
networks supporting international terrorist activities. Under the newly configured
Treasury accounts, the IRS accounts for 91.5% of the proposed Treasury budget,
followed by the Financial Management Service (2.0%), the Bureau of Public Debt
(1.6%), and Departmental Offices (1.5%).
The Administration’s budget request also seeks an increase of $6 million in
funding for FinCen and an additional $4 million for the Department’s International
Technical Assistance program, which aims to assist the efforts of countries torn by
war or political instability to improve their systems of economic governance. In
addition, the Administration is proposing that the Treasury Inspector General for Tax
Administration (TIGTA) be merged with the Office of Inspector General (OIG) on
the grounds that many of the functions once handled by OIG have been transferred
to other agencies, especially DHS.
On July 24, 2003, the House Committee on Appropriations approved by voice
vote a measure (H.R. 2989) to provide funding for Treasury operations in FY2004.
The measure authorizes $11.273 billion in funding, or $423.5 million more than the
amount enacted for FY2003 but $70 million less than the amount requested by the
Bush Administration for FY2004. According to the Committee’s report on H.R.
2989 (H.Rept. 108-243), most of the difference with the Administration’s request
reflects a smaller recommended budget for IRS operations.
More specifically, compared with the Administration’s request, H.R. 2989
provides $36.9 million less in funding for processing, assistance and management;
$6.4 million less in funding for tax law enforcement; and $41.3 million less in
funding for information systems. In addition, the measure provides $8.9 million
more in funding for Treasury’s departmental offices than the Administration has
requested. Most of this increase (89%) is spread among administrative costs arising
from the transfer of functions and personnel to the DHS (+$2.9 million), as well as
increased funding for the Office of International Affairs (+$2.7 million) and the new
Office of Terrorist Financing and Financial Crimes (+$2.3 million). H.R. 2989 also
denies the Administration’s proposal to combine the functions of OIG and TIGTA
into a new Treasury Inspector General on the grounds that such a step would require
“extensive new legislation that has yet to be enacted.” Instead, the bill adds $1.7
million to OIG’s budget for FY2003 and $3.8 million to TIGTA’s budget for
FY2003. But it matches the Administration’s requested funding for FinCen in
FY2004.
After consideration of numerous amendments introduced during the floor debate
on H.R. 2989, the full House approved the measure by a vote of 381 to 39 on
September 9, 2003. Two of the amendments were related to Treasury appropriations
for FY2004. One, introduced by Representative Jim Cooper, would reduce proposed
funding from $100 million to $25 million for a controversial IRS pilot program to
require some taxpayers claiming the earned income tax credit to certify the residency
status of the qualifying child they plan to claim beginning with the 2004 tax year and
divert the $75 million in savings to programs aimed at improving compliance among
large and medium-sized business taxpayers. It failed by a vote of 219 to 192.
The other amendment was introduced by Representative Bernie Sanders and
would bar the Treasury Department from using funds appropriated under H.R. 2989

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CRS-26
to “assist in overturning the judicial ruling” in a case known as Cooper v. IBM. In
July 2003, the federal judge in the case ruled that IBM’s cash benefit pension plan
violated a federal law proscribing discrimination on the basis of age because the rate
of benefit accrual under the plan declines as a participant’s age increases.13 In
December 2002, the IRS issued proposed regulations on the application of age-
discrimination rules to the conversion of traditional pension plans to cash balance
plans.14 Some Members of Congress are concerned that if the IRS were to make
those regulations final, IBM would have a better chance of prevailing if it were to
appeal the judge’s ruling.15 The amendment passed by a vote of 258 to 160.
Otherwise, the House-passed version of H.R. 2989 endorses the recommended levels
of funding for Treasury departmental offices and operating bureaus approved by the
Appropriations Committee.
On September 4, 2003, the Senate Appropriations Committee unanimously
approved a bill (S. 1589) providing $11.196 billion in funding for the Treasury
Department in FY2004. This amount is $202 million more than the amount enacted
for FY2003 but $147 million less than the amount requested by the Bush
Administration and $77 million less than the amount approved by the House for
FY2004. According to the Committee’s report on the legislation (S.Rept. 108-146),
most of the difference between S. 1589 and the Administration’s budget request and
the House-passed version of H.R. 2989 is due to a smaller recommended budget for
IRS operations. More specifically, compared to the Administration’s request, S.
1589 provides $26 million less in funding for tax processing, assistance, and
management, and $79 million less in funding for IRS information systems.
The measure also would merge the IRS accounts for tax law enforcement and
the earned income tax credit compliance initiative, resulting in a drop in
recommended funding for the initiative in FY2004 of $55 million. In addition, S.
1589 would spend nearly $8 million more than the Administration has requested for
Treasury’s departmental offices. A substantial share of this recommended increase
would go to the Office of International Affairs (+$2.7 million) and the Office of
Terrorist Finance and Financial Crimes (+$2.3 million). S. 1589 also denies the
Administration’s proposed merger of the OIG and the TIGTA into a new office
(known as the Inspector General for Treasury), but for a different reason than the one
expressed in the report on H.R. 2989.
The Senate Appropriations Committee opposes the merger mainly because the
duties and responsibilities of OIG and TIGTA “remain vastly different in substance
... and are not conducive to being integrated.” Instead, it recommends an increase in
funding for OIG of $1.6 million and for TIGTA of $3.8 million in FY2004. But, like
H.R. 2989, the bill matches the Administration’s recommended increase in funding
for FinCen of $6.1 million, in part to manage the new responsibilities taken on by the
bureau under the USA Patriot Act of 2001.
13 CRS Report RL30196, Pension Issues: Cash Balance Plans, by Patrick J. Purcell, p. 15.
14 Ibid., pp. 15-16.
15 See Alan K. Ota, “Pension Amendment Unlikely on Transportation-Treasury Bill,” CQ
Weekly, Sept. 13, 2003, p. 2225, available at [http://www.cq.com].

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CRS-27
Internal Revenue Service (IRS). The federal government levies individual
and corporate income taxes, social insurance taxes, excise taxes, estate and gift taxes,
customs duties and miscellaneous taxes and fees. The federal agency responsible for
administering all these taxes and fees, except customs duties, is the IRS.
In
discharging that duty, it receives and processes tax returns and other related
documents, processes payments and refunds, enforces compliance through audits and
other methods, collects delinquent taxes, and provides a variety of services to
taxpayers to help them understand their rights and responsibilities and resolve
problems. In FY2002, the most recent year for which data are available, the IRS
collected $2,017 billion before refunds, the largest component of which was
individual income tax revenue of $1,038 billion.
The Bush Administration is asking Congress for $10.436 billion to fund IRS
operations in FY2004. This amount is 6.1% greater than the $9.834 billion enacted
for FY2003 and 5.2% greater than the amount requested by the Administration for
FY2003. Of the requested budget for FY2004, $4.135 billion would be used for
processing, assistance, and management; $4.086 billion for tax law enforcement;
$1.709 billion for information systems; $500 million for the business systems
modernization program (BSM); $251 million for a program aimed at curbing fraud
and abuse in claims for the earned income tax credit (EITC) known as the Earned
Income Tax Credit Compliance Initiative; and $35 million to administer the health
insurance tax credit. Two proposed enforcement initiatives for FY2004 have aroused
concern or outright opposition among some Members of Congress. One would
allocate $100 million to pilot program to require that some taxpayers to certify the
residency status of the qualifying child before filing a claim for the EITC. Under the
second proposal, the IRS would spend $2 million to hire private collection agents to
collect overdue or unpaid taxes.
The proposed budget places a high priority on improving compliance with tax
laws. It would set aside $133 million for a new program aimed at curbing five
sources of tax evasion: (1) the promotion of abusive tax schemes; (2) the misuse of
trusts and offshore accounts to hide or illegally lower taxable income; (3) the use of
abusive corporate tax avoidance schemes; (4) the under-reporting of income by
upper-income individuals; and (5) the failure of employers to file employment tax
returns and pay substantial amounts of employment taxes in a timely manner. The
Administration contends that such a program will lead to a 72% increase in the
number of audits of tax returns for high-income individuals and businesses.
Nonetheless, some have expressed concern that the Administration’s proposed
funding for IRS operations falls short of what will be needed to enable the IRS to
enforce the tax laws adequately.16
A key player in the annual appropriations process for the IRS is the IRS
Oversight Board, which originated with the IRS Restructuring and Reform Act of
1998. Under the Act, the Board is required to review the annual IRS budget request
16 Alison Bennett, “Rossotti Details IRS Successes, Notes Much Work Remains for Years
Ahead,” Daily Report for Executives, Bureau of National Affairs, no. 210, Oct. 30, 2002,
p. G-6; and George Guttman, “Oversight Board Concerned About IRS Budget Situation,”
Tax Notes, vol. 97, no. 11, pp. 1404-1406.

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CRS-28
prepared by the IRS Commissioner and submit its recommendations to the Secretary
of the Treasury. The President in turn is required to submit the Board’s budget
recommendations to Congress along with his own budget request for the IRS.
For FY2004, the Board recommends that the IRS be given a budget of $10.724
billion, or $287 million more that the amount requested by the Bush
Administration.17 It also recommends that the IRS hire an additional 2,120 full-time
employees in FY2004, compared to the 238 additional full-time employees included
in the Administration’s request. The Board’s budget recommendations are intended
to accomplish three goals:
One is to achieve a real growth rate of 2% in the next five years for the purpose
of channeling adequate resources into efforts to monitor and enforce compliance with
tax laws. The second goal is to provide more resources for the BSM program, which
the Board views as essential to the transformation of the IRS into an efficient, fair,
customer-friendly collector of revenue and enforcer of tax laws. The third goal is to
restore funds for customer service and tax law enforcement that were diverted in
recent years to cover unanticipated expenses, such as unfunded increases in annual
pay raises for federal civilian employees. Nearly 85% of the difference between the
Administration’s budget request for FY2004 and the Board’s recommended budget
is due to funding for two accounts: processing, assistance, and management; and
business systems modernization.
On July 24, 2003, the House Committee on Appropriations passed by voice vote
a measure (H.R. 2989) providing appropriations for the IRS in FY2004. It funds the
agency at a level of $10.352 billion, or $517 million more than the amount enacted
for FY2003 but $85 million less than the amount requested by the Bush
Administration.
More specifically, the measure provides $4.038 billion for
processing, assistance, and management; $4.221 billion for tax law enforcement;
$1.629 billion for information systems; $429 million for business systems
modernization; and $35 million for administering the health insurance tax credit.
The lower level of funding approved by the Committee, relative to the
Administration’s budget request, is spread over three appropriations accounts:
processing, assistance, and management (-$36.9 million); tax law enforcement (-$6.4
million); and information systems (-$41.3 million). Among the IRS programs and
initiatives receiving favorable comment in the Committee’s report (H.Rept. 108-243)
are low-income taxpayer clinics (which would receive $8 million in funding), the tax
counseling program for elderly taxpayers (which would receive $4.25 million in
funding), the emerging partnership between the IRS and suppliers of tax-return
software in implementing the Free-File Alliance, a controversial pilot program for
pre-certifying persons eligible for the earned income tax credit (which would receive
$100 million in funding), and a controversial proposal to hire private collection
agencies to collect overdue or unpaid taxes.
17 For more details on the Board’s budget recommendations for FY2004, see the statement
made by Nancy Killefer, the chair of the IRS Oversight Board, before the House
Appropriations Subcommittee on Transportation and Treasury on May 7, 2003, available
at [www.nexis.com].

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CRS-29
The House overwhelmingly passed H.R. 2989 on September 9, 2003. Its
version endorses the recommended funding levels for IRS accounts in FY2004
approved by the Appropriations Committee. Under an amendment adopted by the
House during floor debate on the measure, none of the funds appropriated in the
measure may be used to help overturn a federal judge’s recent ruling that IBM’s cash
balance pension plan violates a federal law barring age discrimination. The sponsors
of the amendment are seeking to prevent the IRS from making final proposed
regulations it issued in December 2002 on the application of age-discrimination rules
to the conversion of traditional pension plans to cash balance plans it issued in
December 2002. They are concerned that such a step would strengthen IBM’s hand
if it were to appeal the judge’s ruling.
On September 4, 2002, the Senate Appropriations Committee unanimously
approved a measure
(S. 1589) providing $10.276 billion in funding for IRS
operations in FY2004. This amount is $296 million more than the amount enacted
in FY2003 but $160 million less than the amount requested by the Administration
and $76 million less than the amount approved by the House.
More specifically, S. 1589 recommends spending $4.048 billion on processing,
assistance and management (or $26 million below the Administration’s request but
$10 million above the amount in H.R. 2989); $4.173 billion on tax law enforcement
(or $196 million above the Administration’s request but $48 million below the
amount in H.R. 2989); $1.591 billion on information systems (or $79 million below
the Administration’s request and $38 million below the amount in H.R. 2989); $429
million for business systems modernization (or the same amount requested by the
Administration and contained in H.R. 2989); and $35 million to administer the health
insurance tax credit (or the same amount requested by the Administration and
contained in H.R. 2989).
The Committee report (S.Rept. 108-146) on the bill singles out two IRS
programs for praise: the Tax Counseling Program for the Elderly and Low-Income
Taxpayer Clinics. It recommends that the former be funded at a level of $3.9 million
and the latter at a level of $7.0 million in FY2004.
In addition, the report
recommends that the IRS manage its earned income tax compliance initiative as part
of its budget for tax law enforcement, and that the IRS “realign development
activities funded under the Information Systems account so that they are managed
and integrated formally into Business Systems Modernization activity.” It is unclear
from the report what view the Committee takes of recent controversial proposals to
pre-certify the eligibility of certain taxpayers for the earned income tax credit and to
hire private collection agents to collect unpaid or overdue taxes.

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Title III: Postal Service
Table 7. Title III: United States Postal Service Appropriations
(in millions of dollars)
FY2004
FY2004
FY2003
FY2004
FY2004
Program or Account
House
Senate
Enacted
Request
Enacted
Passed
Reported
Payment to the Postal Service
Fund
29
29
29
29
Advance Appropriation,
FY2002/2003
47
31
31
31
Advance Appropriation,
FY2004
31
37
37
37
Total, Postal Service
107
97
97
97
Source: United States House of Representative, Committee on Appropriations, House Report 108-243, Table:
Comparative Statement of Budget Authority, except Senate figures from Senate Committee on Appropriations,
Senate Report 108-146, Table: Comparative Statement of Budget Authority.
Note: The Senate lists the Postal Service appropriation under the “Related Agencies” (“Independent Agencies”
in the Senate report) Title, rather than as a separate title.
The U.S. Postal Service (USPS) generates nearly all of its funding—about $67
billion—annually through the sale of products and services. It does receive a regular
appropriation from Congress, however, to compensate for revenue it forgoes in
providing, at congressional direction, free mailing privileges for the blind and
visually impaired and for overseas voting. Under the Revenue Forgone Reform Act
of 1993, Congress is required to reimburse USPS $29 million each year until 2035,
for services performed but not paid for in the 1990s (for more information, see CRS
Report RS21025, The Postal Revenue Forgone Appropriation: Overview and
Current Issues). The terrorist attacks in the fall of 2001, however, including use of
the mail for delivery of anthrax spores to congressional and media offices, generated
new funding needs that USPS contends should be met through appropriations.
In FY2003, USPS received a revenue forgone appropriation of $59.6 million,
including $30.8 million for revenue forgone in FY2003 but not payable until October
1, 2003, and the $29 million ($28.8 after rescission) due annually under the Revenue
Forgone Reform Act of 1993.
In its FY2004 Budget, the Administration proposed an appropriation of $55.7
million for revenue forgone in fiscal 2004, and $29 million for the FY2003
installment under the Revenue Forgone Reform Act of 1993—reduced by $19.2
million as a reconciliation adjustment to reflect actual versus estimated free mail
volume in 2001—for a total of $65.5 million. Of this amount, $36.5 million would
not be available for obligation until October 1, 2004, which is in FY2005. However,
USPS will also have available for obligation during FY2004 the $31 million
provided for revenue forgone in fiscal 2002, for a total of $60 million. In its FY2002
Budget, the Bush Administration had proposed to “reverse the misleading budget
practice of using advance appropriations simply to avoid [annual] spending
limitations.” The Administration did not renew the proposal in its FY2003 or
FY2004 Budgets.

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In its detailed justification of its FY2004 budget request, USPS asked Congress
for an additional $350 million (above the OMB proposal of $65.5 million) in
emergency response funds to protect the safety of employees and customers from
threats such as the 2001 anthrax attack. The funds would be used to continue
acquisition and deployment of ventilation and filtration equipment that was begun
with $762 million provided in FY2002 specifically for emergency response. Neither
the Administration’s FY2003 Budget nor its FY2004 Budget included any additional
funds for emergency preparedness for the Postal Service. As a condition to receiving
the largest part of its previous emergency response funding, on March 6, 2002 USPS
submitted to its oversight and appropriations committees an emergency preparedness
plan to combat the threat of biological and chemical substances in the mail.18 The
March 6, 2002 emergency preparedness plan did identify substantial needed
appropriations of $799.8 million for FY2003, and $897.5 million for FY2004.
Both the House-passed and the Senate Appropriations Committee’s version of
the FY2004 bill mirrored the Administration’s request, providing $60 million for
FY2004, made up of $29 million for past revenue forgone, and $31 million payable
in FY2004 though appropriated in the FY2003 law. The House and the Senate
Committee also provided $36.5 million as an advance appropriation for revenue
forgone to be payable in FY2005. Neither Committee’s report referred to the Postal
Service’s supplementary request for bio-terrorism prevention. Both versions of the
bill continue long-standing language forbidding USPS to reduce service below the
six-day delivery and rural delivery standards that have prevailed since 1983, or to
close rural or other small post offices during FY2004.
The Administration’s Budget also contained a proposal to correct an anticipated
over-funding of USPS obligations for the retirement benefits of postal workers under
the Civil Service Retirement System. Congress has passed legislation (P.L. 108-18)
to reduce the annual USPS contribution to the Civil Service Retirement and
Disability Fund, which will have the effect of saving USPS $2.9 billion in FY2003
and $2.6 billion in succeeding years. For more on this legislation, see CRS Report
RL31684, Funding Postal Service Obligations to the Civil Service Retirement
System.
18 See [http://www.usps.com/news/2002/press/pr02_pmg0313.htm ], visited Sept. 11, 2003.

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Title IV: Executive Office of the President (EOP) and
Funds Appropriated to the President
Table 8. Title IV: Executive Office of the President (EOP) and
Funds Appropriated to the President Appropriations
(in millions of dollars)
FY2004
FY2004
FY2003
FY2004
FY2004
Office
House
Senate
Enacted
Request
Enacted
Passed
Reported
Compensation of the President
0.5
—
0.5
0.5
The White House Office (salaries
and expenses)
50
—
66
62
Office of Homeland Security
19
—
—
8
Executive Residence at the White
House (operating expenses)
12
—
13
13
White House Repair and
Restoration
1
—
4
4
Council of Economic Advisors
4
—
4
5
Office of Policy Development
3
—
4
4
National Security Council
8
—
9
11
Office of Administration
91
—
83
77
The White House
—
184
—
—
Office of Management and Budget
62
77
63
75
Office of National Drug Control
Policy (salaries and expenses)
26
27
29
28
Office of National Drug Control
Policy Counterdrug Technology
Assessment Center
48
40
40
42
Federal Drug Control Programs:
High Intensity Drug Trafficking
Areas Program
225
206
226
226
Federal Drug Control Programs:
Other Programs
222
250
230
174
Office of the Vice President
(salaries and expenses)
4
4
4
4
Official Residence of the Vice
President (operating expenses)
0.3
0.3
0.3
0.3
Total, EOP and Funds
Appropriated to the President
777
791
777
735
Source: United States House of Representative, Committee on Appropriations, House Report 108-243, Table:
Comparative Statement of Budget Authority, except Senate figures from Senate Committee on Appropriations,
Senate Report 108-146, Table: Comparative Statement of Budget Authority.
The Transportation, Treasury and General Government Appropriations bill
funds all but three offices in the Executive Office of the President (EOP). Of the
three exceptions, the Council on Environmental Quality and Office of Environmental
Quality, and the Office of Science and Technology Policy are funded under the
Veterans Affairs, Housing and Urban Development, and Independent Agencies
appropriations; and the Office of the United States Trade Representative is funded

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under the Commerce, Justice, State, and the Judiciary and Related Agencies
appropriations.
The President’s FY2004 budget proposes to consolidate and financially realign
several annual EOP salaries and expenses appropriations that directly support the
President into a single annual appropriation, called “The White House.” This
consolidated appropriation would total $183.8 million in FY2004, a decrease of 3.0%
from the $189.4 appropriated in FY2003 for the accounts proposed to be
consolidated. The accounts included in the consolidated appropriation would be:
! Compensation of the President
! White House Office (including resources for the Office of Homeland
Security)
! Executive Residence/White House Repair and Restoration
! Office of Policy Development
! Council of Economic Advisers
! National Security Council
! Office of Administration
The budget states that the consolidation “initiative provides enhanced flexibility
in allocating resources and staff in support of the President and Vice President, and
permits more rapid response to changing needs and priorities.”19 The Administration
proposed similar consolidations in the FY2002 and FY2003 budgets, but the
conference committees for the Treasury and General Government Appropriations
Act, FY2002 (P.L. 107-67) and FY2003 (P.L. 108-7, Division J) agreed to continue
with separate appropriations for the EOP accounts. A concern of the Administration
has been the “needless complexity [of different accounts] that adds expense, that
adds burdens, that adds administrative hurdles that they must go through to
accomplish anything.”20 A concern of Congress about consolidation has been its
“legitimate needs and desires to have oversight over spending of public funds.”21
Included with the FY2004 budget request for consolidation is a proposal for a
Title VI general provision that would provide for a 10% transfer authority among the
following accounts:
! The White House (Compensation of the President, White House
Office (including the Office of Homeland Security), Executive
Residence, White House Repair and Restoration, Office of
Administration, Office of Policy Development, National Security
Council, Council of Economic Advisers)
19 U.S. Executive Office of the President, Office of Management and Budget, Budget of the
United States Government Fiscal Year 2004 Appendix (Washington: GPO, 2003), p. 882.
(Hereafter referred to as FY2004 Budget, Appendix.)
20 Representative Ernest Istook, then chairman of the Subcommittee on Treasury, Postal
Service and General Government of the House Committee on Appropriations, discussing
the FY2002 proposal for consolidation of the Executive Office of the President accounts.
Congressional Record, daily edition, July 25, 2001, p. H4570.
21 Ibid.

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CRS-34
! Office of Management and Budget
! Office of National Drug Control Policy
! Special Assistance to the President and Official Residence of the
Vice President (transfers would be subject to the approval of the
Vice President)
! Council on Environmental Quality and Office of Environmental
Quality
! Office of Science and Technology Policy
! Office of the United States Trade Representative22
According to the EOP budget submission, the transfer authority would “allow
the President to address, in a limited way, emerging priorities and shifting demands”
and would “provide the President with flexibility, improve the efficiency of the EOP,
and reduce administrative burdens.”23 The OMB director, or such other officer as the
President may designate, could, 15 days after giving notice to the Senate and House
Committees on Appropriations, transfer up to 10% of any appropriation to any other
appropriation, to be merged with, and available for, the same time and for the same
purposes as the appropriation to which transferred. An appropriation could not be
increased by more than 50% by such transfers.24
Both the House and the Senate Committees on Appropriations recommended
that separate appropriations for the EOP accounts be continued and that the transfer
authority proposal not be agreed to.
According to the committee report
accompanying S. 1589:
Last year, the Committee gave this request considerable deliberation and
concluded that the existing structure served the Committee’s and the public’s
need for transparency in the funding and operation of these important functions
well.
The existing structure also provides the executive branch with the
flexibility it needs to reprogram funds within accounts to address unforseen
budget needs upon the notification and approval of the Committee. As noted in
discussions with administration officials in past years, at no time has this
Committee rejected an administration’s request to reprogram existing funds
within accounts in this Title.25
EOP Offices Funded Through Treasury and General Government
Appropriations. The President’s FY2004 budget for EOP programs funded under
the Treasury and General Government appropriations proposes an appropriation of
$790.6 million, an increase of 1.7% over the $777.0 million appropriated in FY2003.
The FY2004 budget proposals for specific accounts are discussed below.
22 FY2004 Budget, Appendix, p. 882. U.S. Executive Office of the President, Fiscal Year
2004 Congressional Budget Submission (Washington: GPO, [Feb. 2003]), p. 11. (Hereafter
referred to as EOP Budget Submission.)
23 EOP Budget Submission, p. 11.
24 Ibid.
25 S.Rept. 108-146, p. 132.

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Compensation of the President. The President’s FY2004 budget proposes
an appropriation of $450,000, which includes an expense allowance of $50,000. This
is the same amount as was appropriated in FY2003. The salary of the President is
$400,000 per annum, effective January 20, 2001. The House and Senate Committees
on Appropriations recommended and the House passed the same amount as the
President requested.
White House Office (WHO). This account provides the President with staff
assistance and administrative services. The President’s FY2004 budget proposes an
appropriation of $70.3 million, an increase of 39.5% over the $50.4 million
appropriated in FY2003.
The House Committee on Appropriations recommended and the House passed
an appropriation of $66.057 million, of which $8.65 million would be for
reimbursements to the White House Communications Agency. The amount is $4.2
million less than the President’s request. The reduction is taken from the Office of
Homeland Security funding which is included in the White House Office
appropriation (see below). The Committee again requests that the Executive Office
of the President, within 30 days of the Act’s enactment, provide “a detailed report on
the status of efforts to safely resume public tours of the White House.” Such a report
had been requested in the 2003 appropriations bill, but the committee report
accompanying H.R. 2989 states that the EOP “provided a cursory, four-sentence
‘report’ that said very little about the status of efforts in this regard.”26
The Committee also directs that both the House and Senate Committees on
Appropriations receive a report on the renovations of the Eisenhower Executive
Office Building no later than November 15, 2003. According to the committee report
accompanying H.R. 2989:
On repeated occasions, the Committee has sought specific answers to questions
about the use of non-federal funds for renovating and furnishing GSA facilities
occupied by agencies of the Executive Office of the President. In particular, the
Committee believes more information is needed on the use of non-federal
funding for renovation and furnishing efforts for the Eisenhower Executive
Office Building [EEOB], for which $65,757,000 is included in this bill. The
Committee directs EOP to review and report on the use of non-federal funds for
renovation and furnishings in the [EEOB] .... should identify the federal agency
that coordinated the work funded by non-federal sources, the specific sources and
amounts of non-federal funding used, a description of each project, and an
explanation of why non-federal funds were used in each specific instance.
Finally, the report should determine which agency’s gift authority was used to
accept the contribution of non-federal funds and whether this authority was used
properly. Given EOP’s reluctance to provide information on this subject thus far,
a provision is included in the bill prohibiting the obligation of more than
$35,000,000 on this project until this report is submitted to the Congress.27
26 H.Rept. 108-243, pp. 163-164.
27 H.Rept. 108-243, p. 164.

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The Senate Committee on Appropriations recommended an appropriation of
$61.9 million, “a decrease of $8,331,000 below the budget estimate as funds
requested under this account for the Homeland Security Council are provided in a
separate account.”28 Of the total, $8.6 million would be available for reimbursements
to the White House Communications Agency.
Office of Homeland Security (OHS). This office provides support and
advice to the President and interagency coordination of all aspects of homeland
security, including the implementation of the National Strategy for Homeland
Security. The funding for OHS is included in the White House Office request. Of
the $70.3 million requested for the WHO for FY2004, $8.3 million is for the OHS.
The OHS FY2003 appropriation was $19.3 million. The Homeland Security Council
functions established in the Homeland Security Act of 2002, P.L. 107-296, are
supported by the OHS budget.
The House Committee on Appropriations recommended and the House passed
an appropriation of $4.1 million, which is $4.2 million less than the President’s
request of $8.3 million. The committee report accompanying H.R. 2989 explained
the recommendation as follows.
It is clear that most of [the responsibilities of OHS] have now been assumed by
the Secretary of the Department of Homeland Security [DHS]. Although the
Administration has changed the “Office of Homeland Security” to the
“Homeland Security Council,” it is not clear what work remains that cannot be
effectively performed by the [DHS]. Although the Committee understands the
President’s need for policy support and advice, it is not clear why that would
require 66 staff, given the existence and support of the [DHS].29
The Senate Committee on Appropriations recommended the same appropriation
as the President requested. The Committee did not approve funding for the council
within the White House Office, believing that the council “should be funded as a
separate account, which is consistent with the budgetary treatment of its predecessor,
the Office of Homeland Security.”30
Executive Residence (White House) Operation and Care. These
accounts provide for the care, maintenance, and operation of the Executive Residence
and its repair, alteration, and improvement.
The President’s FY2004 budget proposes an overall appropriation of $16.7
million for this account, an increase of 25.4% over the $13.3 million appropriated in
FY2003. For the executive residence, the budget proposes an appropriation of $12.5
million, an increase of 2.9% over the $12.3 million appropriated in FY2003. For
repair and restoration of the White House, the budget proposes an appropriation of
$4.2 million, an increase of 254.4% over the $1.2 million appropriated in FY2003.
The EOP budget submission states that the repair and restoration funding would be
28 S.Rept. 108-146, p. 132.
29 H.Rept. 108-243, p. 163.
30 S.Rept. 108-146, p. 135.

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CRS-37
used to renovate various specific electrical, mechanical, and control system
components; replace two power servers; and complete the second phase of the
restoration of the East and West Wing exterior.31
Maintenance and repair costs for the White House are also funded by the
National Park Service as part of that agency’s responsibility for national monuments.
Entertainment costs for state functions are funded by the Department of State.
Reimbursable political events in the Executive Residence are to be paid for in
advance by the sponsor, and all such advance payments are to be credited to a
Reimbursable Expenses account. The political party of the President is to deposit
$25,000 to be available for expenses relating to reimbursable political events during
the fiscal year.
Reimbursements are to be separately accounted for and the
sponsoring organizations billed, and charged interest, as appropriate. The staff of the
Executive Residence must report to the Committees on Appropriations, after the
close of each fiscal year, and maintain a tracking system on the reimbursable
expenses.
The House and Senate Committees on Appropriations recommended and the
House passed the same appropriations as the President requested. The House
committee report accompanying H.R. 2989 states that the repair and restoration funds
“will finance the ongoing restoration of the east and west wing exterior ($3,500,000),
replacement or repair of various electrical, mechanical, and control system
components ($530,000), and replacement of computer servers and backup power
supplies ($195,000).”32
Special Assistance to the President (Office of the Vice President).
This account funds the Vice President in carrying out the responsibilities assigned to
him by the President and by law.
The President’s FY2004 budget proposes an appropriation of $4.5 million for
salaries and expenses, an increase of 10.4% over the $4.0 million appropriated in
FY2003. According to the EOP budget submission:
An additional programmatic increase of $70,000, or 1.7 percent was requested
for costs associated with official Vice Presidential travel. Since September 11,
2001, the Vice President’s travel has been augmented by travel to undisclosed
locations for security purposes. This travel is 100 percent official ...33
The House and Senate Committees on Appropriations recommended and the
House passed the same appropriation as the President requested. This funding level
“will allow for 24 full-time permanent positions in fiscal year 2004,” according to the
Senate committee report accompanying S. 1589.34
31 EOP Budget Submission, p. 62.
32 H.Rept. 108-243, p. 165.
33 EOP Budget Submission, p. 164.
34 S.Rept. 108-146, p. 133.

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Official Residence of the Vice President. This account provides for the
care and operation of the Vice President’s official residence and includes the
operation of a gift fund for the residence.
The President’s FY2004 budget proposes an appropriation of $331,000 for the
operating expenses of the Official Residence, an increase of 2.8% over the $322,000
appropriated in FY2003.
The House and Senate Committees on Appropriations recommended and the
House passed the same appropriation as the President requested. In its report
accompanying S. 1589, the Senate Committee stated that it “has had a longstanding
interest in the condition of the residence and expects to be kept fully apprised by the
Vice President’s office of any and all renovations and alterations made to the
residence by the Navy.”35
Council of Economic Advisers (CEA). The three-member council was
created in 1946 to assist and advise the President in the formulation of economic
policy.
The council analyzes and evaluates the national economy, economic
developments, federal programs, and federal policy to formulate economic advice.
The council assists in the preparation of the annual Economic Report of the President
to Congress.
The President’s FY2004 budget proposes an appropriation of $4.5 million, an
increase of 20.4% over the $3.8 million appropriated in FY2003.
The House Committee on Appropriations recommended and the House passed
an appropriation of $4 million, $502,000 less than the President’s request. The
Senate Committee on Appropriations recommended the same appropriation as the
President requested.
Office of Policy Development. The Office supports and coordinates the
Domestic Policy Council (DPC) and the National Economic Council (NEC) in
carrying out their responsibilities to advise and assist the President in formulating,
coordinating, and implementing economic and domestic policy. The office also
supports other policy development and implementation initiatives.
The President’s FY2004 budget proposes an appropriation of $4.1 million, an
increase of 27.2% over the $3.2 million appropriated in FY2003. Of the total, an
estimated $2.1 million supports the Office of Policy Development’s DPC functions
and $2.0 million supports the office’s NEC functions.36
The House and Senate Committees on Appropriations recommended and the
House passed the same appropriation as the President requested.
35 S.Rept. 108-146, p. 134.
36 EOP Budget Submission, p. 102.

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National Security Council (NSC). The NSC advises the President on
integrating domestic, foreign, military, intelligence, and economic policies relating
to national security.
The President’s FY2004 budget proposes an appropriation of $10.6 million, an
increase of 35.8% over the $7.8 million appropriated in FY2003. Of the total, $9.8
million funds the operations of the NSC, including the Office for Combating
Terrorism, and $741,000 funds the President’s Foreign Intelligence Advisory
Board.37
The House Committee on Appropriations recommended and the House passed
an appropriation of $9 million, $1.6 million less than the President’s request. The
Senate Committee on Appropriations recommended the same appropriation as the
President requested.
This funding level “will support 60 full-time equivalent
positions, or the same since the fiscal year 1996 level for the normal activities of the
NSC.”38
Office of Administration.
The Office of Administration provides
administrative services, including information technology; human resources
management; library and records management; financial management; and facilities,
printing, and supply, to the Executive Office of the President.
The President’s FY2004 budget proposes an appropriation of $77.2 million, a
decrease of 15.1% from the $90.9 million appropriated in FY2003. Of the total,
$56.6 million is for salaries and expenses and $20.6 million is for capital
investment.39
The House Committee on Appropriations recommended and the House passed
an appropriation of $82.8 million of which $17.5 million would remain available
until expended for the Capital Investment Plan for continued modernization of the
information technology infrastructure within the EOP. This amount is $5.7 million
more than the President’s request. The committee report accompanying H.R. 2989
states that the “recommendation maintains funding to continue the core enterprise
pilot program in this account (+$8,258,000) and acknowledges program savings for
security guard services provided to the Office of Science and Technology Policy (-
$1,096,000) and for information technology contract services provided to the
Homeland Security Council (-$1,500,000).” The Committee also recommends
continuation of the “pilot project to determine whether economies of scale could be
achieved through centralized procurement of certain common goods and services.”40
The Senate Committee on Appropriations recommended the same appropriation
as the President requested. Of the total, $20.6 million would remain available until
expended for the Capital Investment Plan for continued modernization of the
37 EOP Budget Submission, p. 129.
38 S.Rept. 108-146, p. 135.
39 EOP Budget Submission, p. 73.
40 H.Rept. 108-243, pp. 166-167.

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information technology infrastructure within the EOP. The EOP would submit a
report to the Committees on Appropriations that includes a current description of (1)
the Enterprise Architecture, as defined in OMB Circular A-130 and the Federal Chief
Information Officers Council guidance; (2) the Information Technology (IT) Human
Capital Plan; (3) the capital investment plan for implementing the Enterprise
Architecture; and (4) the IT capital planning and investment control process. The
report would be reviewed and approved by OMB, and reviewed by GAO. In its
report accompanying S. 1589, the Committee states its continuing support for the
Centralized Procurement Pilot Project, “but recommends funding for such items
[information technology, rent, printing and reproduction, supplies and materials and
equipment] in individual offices within the EOP until saving and other benefits are
identified.”41
Office of Management and Budget (OMB). OMB assists the President
in discharging budgetary, management, and other executive responsibilities. The
agency’s activities include preparing the budget documents; examining agency
programs, budget requests, and management activities; preparing the government-
wide financial management status report and five-year plan (with the Chief Financial
Officer Council); reviewing and coordinating agency regulatory proposals and
information collection requirements; and promoting economical, efficient, and
effective procurement of property and services for the executive branch.
The President’s FY2004 budget proposes an appropriation of $77.4 million, an
increase of 24.9% over the $62.0 million appropriated in FY2003. According to the
EOP budget submission, “Since the start of the Administration, OMB has maintained
a very tight budget” and “In light of constrained funding levels over the past two
years, the majority of the increase in the FY2004 request will permit OMB to
continue current operations.”42
The House Committee on Appropriations recommended and the House passed
an appropriation of $62.8 million, $14.6 million less than the President’s request.
Savings would be derived from deferring proposed discretionary initiatives ($2.4
million), assuming 20 fewer staff years than budgeted ($1.5 million), limiting
reception and representation expenses to half of the budget estimated amount
($1,500), reducing funding for the office of information and regulatory affairs ($2.5
million), and transferring funds back to the pilot project on centralized procurement
of common goods and services discussed under the Office of Administration ($8.3
million). The Committee also directs OMB
To the extent that OMB establishes individual agency targets in its internal
guidance [on competitive sourcing targets], the agency is directed within 30 days
of establishing such targets, to submit a report to the House and Senate
Committees on Appropriations that indicates each agency’s competitive sourcing
target. The report should specifically detail the research and analysis that was
used in determining each agency’s individual target, goal or quota. To the extent
that such targets change over time, OMB is directed to maintain an up-to-date
41 S.Rept. 108-146, p. 136.
42 EOP Budget Submission, p. 189.

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CRS-41
record of such changes and convey the changes periodically to the
[appropriations committees] and the appropriate legislative committees.
[T]o submit a report to the House and Senate Committees on Appropriations, not
later than April 1, 2004, detailing the amount of federal funds used by federal
grantees to pay dues, fees, or other types of membership costs to national
associations or other types of professional organizations.
[T]o involve the House and Senate Committees on Appropriations in the
development of PART [program assessment rating tool] ratings [which rate the
effectiveness of federal programs] at all stages in the process.43
The Senate Committee on Appropriations recommended an appropriation of
$75.4 million, $2 million less than the President’s request. “[T]he reduction is
manageable by limiting the growth for staff and professional development,”
according to the committee report accompanying S. 1589.44 The Committee also
expressed its concern “that agencies are shielding significant, influential data and
related documents funded by the Federal government from the requirements of the
Federal Data Quality Act [FDQA]” and “directs the Administrator of the Office of
Information and Regulatory Affairs [OIRA] to submit a report to the House and
Senate Committees on Appropriations not later than 30 days on how guidelines to
agencies may be updated to address these concerns and improve the transparency of
agency science.” Expressing strong support for the Truman Scholarship program, the
Committee directs the program’s board “to strictly adhere to its statutory mandate to
assure that at least one Truman scholar shall be selected each year from each State
in which there is at least one resident applicant who meets the minimum criteria
established by the Foundation.”45
Office of National Drug Control Policy (ONDCP). The ONDCP develops
policies, objectives, and priorities for the National Drug Control Program. The
account also funds general policy research to support the formulation of the National
Drug Control Strategy.
The President’s FY2004 budget proposes an appropriation of $27.3 million, an
increase of 3.8% over the $26.3 million appropriated in FY2003. Of the total, $25.9
million is for salaries and expenses operations and $1.4 million is for policy
research.46
The House Committee on Appropriations recommended and the House passed
an appropriation of $28.8 million (policy research and evaluation would be funded
at $1.35 million and the National Alliance for Model State Drug Laws would be
funded at $1.5 million). This amount is $1.5 million more than the President’s
request.
43 H.Rept. 108-243, pp. 167-169.
44 S.Rept. 108-146, p. 136.
45 Ibid., p. 137.
46 EOP Budget Submission, p. 216.

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CRS-42
The Senate Committee on Appropriations recommended an appropriation of
$27.996 million, $706,500 more than the President’s request. Of the total, $1.350
million would remain available until expended for policy research and evaluation and
$1.5 million is to be used for the National Alliance for Model State Drug Laws.
The Counterdrug Technology Assessment Center (CTAC). The
CTAC is the central counterdrug research and development organization for the
federal government.
The President’s FY2004 budget requests $40 million, a decrease of 16.1% from
the $47.7 million appropriated in FY2003.
Of the total, $18 million is for
counternarcotics research and development projects (which shall be available for
transfer to other federal departments or agencies) and $22 million is for the continued
operation of the technology transfer program.47
The House Committee on Appropriations recommended and the House passed
the same appropriation as the President requested. Counternarcotics research and
development projects would be funded at $18 million (and available for transfer to
other federal departments or agencies) and the continued operation of the technology
transfer program would be funded at $22 million.
The Senate Committee on Appropriations recommended an appropriation of $42
million, $2 million more than the President’s request. Of the total, $18 million
would be for counternarcotics research and development projects and would be
available for transfer to other federal departments or agencies. The continuation of
the technology transfer program to State and local law enforcement in their efforts
to combat drugs is funded at $24 million. Several Committee expectations with
regard to CTAC are stated in the report accompanying S. 1589. In addition, ONDCP
is directed “to report to the House and Senate Committees on Appropriations, no
later than December 15, 2003, on CTAC funding allocations, specifically providing
a detailed spending plan for the research and development program as well as the
technology transfer program for fiscal years 2001, 2002, and 2003.” The Committee
requests “that the fiscal year 2005 budget request include a specific accounting of the
total number of grant applications received and the number awarded in the previous
year so that the Committee may have a true understanding of CTAC’s ability to meet
demand.”48
Federal Drug Control Programs. The High Intensity Drug Trafficking
Areas (HIDTA) program provides assistance to federal, state, and local law
enforcement entities operating in those areas most adversely affected by drug
trafficking. Funds are disbursed at the discretion of the director of ONDCP for joint
local, state, and federal initiatives.
The President’s FY2004 budget proposes an appropriation of $206.4 million,
a decrease of 8.2% from the $224.9 million appropriated in FY2003. No less than
51% of the total shall be transferred to State and local entities for drug control
47 FY2004 Budget, Appendix, p. 1053.
48 S.Rept. 108-146, p. 138.

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CRS-43
activities, which shall be obligated within 120 days of enactment of the
Transportation/Treasury appropriations act. Up to 49% of the total shall remain
available until September 30, 2005, and may be transferred to federal agencies and
departments at a rate to be determined by the director, of which not less than $2.1
million shall be used for auditing services and associated activities, and at least
$500,000 of the $2.1 million shall be used to develop and implement a data
collection system to measure the performance of the High Intensity Drug Trafficking
Areas Program.49
The House Committee on Appropriations recommended and the House passed
an appropriation of $226.4 million, $20 million more than the President’s request.
According to the committee report accompanying H.R. 2989, the increase is
to meet requirements to fully fund existing HIDTA program activity, to expand
HIDTAs where such expansion is justified, to fund new HIDTAs as appropriate,
and to fund HIDTA activities through the Central Priority Organization Targets
(CPOT) initiative .... The Committee directs that HIDTAs existing in fiscal year
2003 shall receive funding at least equal to the fiscal year 2003 initial allocation
level, which does not include funding provided through the CPOT initiative ....
As ONDCP reviews candidates for new HIDTA funding, the Committee
recommends that it consider the following: increased funding for the Central
Florida, Central Valley, Lake County, and Midwest (Platte and Madison
counties, Nebraska) HIDTAs; and expansion of the Appalachian HIDTA
(Letcher County, Kentucky).50
The Senate Committee on Appropriations recommended an appropriation of
$226.350 million, $20 million more than the President’s request. The additional
amount, which is subject to reprogramming guidelines, is to fully fund existing
HIDTA program activities, expand existing HIDTAs where warranted, and fund new
HIDTAs and new HIDTA activities that are consistent with the program’s mission.
Existing HIDTAs are to be funded at no less than the FY2003 initial allocation level,
unless the ONDCP Director submits to, and the House and Senate Committees on
Appropriations approve, a request to reprogram funds “based on clearly articulated
priorities for the HIDTA program, as well as published ONDCP performance
measures of effectiveness.”51 No funds would be used for any further or additional
consolidation of the Southwest Border HIDTA, except for the operation of an office
with a coordinating role, until the office submits a report on the structure of the
HIDTA. According to the committee report accompanying S. 1589:
In allocating the HIDTA funds, the Committee expects the Director of ONDCP
to ensure that the activities receiving these limited additional resources are used
strictly for implementing the strategy for each HIDTA, taking into consideration
local conditions and resource requirements. These funds should not be used to
supplant existing support for ongoing Federal, State, or local drug control
operations normally funded out of the operating budgets of each agency. The
49 FY2004 Budget, Appendix, p. 1051.
50 H.Rept. 108-243, p. 170.
51 S.Rept. 108-146, p. 139.

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CRS-44
remaining funds may be transferred to Federal agencies and departments to
support Federal antidrug activities.52
Several Committee expectations with regard to the HIDTA program are stated
in the report. Additionally, the Committee directs ONDCP to consult with the House
and Senate Committees on Appropriations “in the developmental stages of any new
grant programs that it plans to institute in the future.”53 ONDCP also is directed by
the Committee “to coordinate with other Federal agencies with a core mission to
target international drug traffickers in an effort to pool personnel, intelligence, and
available resources to further the originally conceived CPOT [Consolidated Priority
Organizational Targets] program and to report to the House and Senate Committees
on Appropriations no later than 90 days after enactment of this Act on the progress
of these efforts.” The General Accounting Office is directed “to conduct a study on
the effectiveness of the CPOT program, its conformity with the HIDTA mission ...
and what resources other Federal law enforcement agencies contribute to the
program.”54 Committee views with regard to methamphetamine reduction, and issues
specific to the Midwest, New England, Southwest Border, Appalachia, Northwest,
and Southern Ohio HIDTAs also are expressed in the report.55
Other Federal Drug Control Programs (formerly The Special
Forfeiture Fund). The account, administered by the director of ONDCP, supports
high-priority drug control programs. The funds may be transferred to drug control
agencies or directly obligated by the ONDCP director.
The President’s FY2004 budget proposes an appropriation of $250 million, an
increase of 12.7% over the $221.7 million appropriated in FY2003. Of the total,
$170 million is to support a national media campaign, as authorized by the Drug-Free
Media Campaign Act of 1998; $70 million is for a program of assistance and
matching grants to local coalitions and other activities, as authorized in chapter 2 of
the National Narcotic Leadership Act of 1988, as amended; $4.5 million is for the
Counterdrug Intelligence Executive Secretariat; $2 million is for evaluations and
research related to National Drug Control Program performance measures; $1 million
is for the National Drug Court Institute; $1.5 million is for the United States Anti-
Doping Agency for anti-doping activities; and $1 million is for the United States
membership dues to the World Anti-Doping Agency.56
The House Committee on Appropriations recommended and the House passed
an appropriation of $230 million. The money would be allocated in the same manner
as the President proposed except that $150 million would support a national media
campaign. This amount is $20 million less than the President’s request. According
to the committee report accompanying H.R. 2989, “The Committee has changed the
name of the Special Forfeiture Fund account to Other Federal Drug Control Programs
52 Ibid.
53 Ibid., p. 140.
54 Ibid.
55 S.Rept. 108-146, pp. 140-142.
56 FY2004 Budget, Appendix, p. 1052.

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CRS-45
as requested by the President, reflecting the fact that this account receives no
forfeiture funds but only direct appropriations.” The report “encourages ONDCP to
explore options for using alternative media in schools as a way of utilizing traditional
learning tools in non-traditional ways, such as children’s books tailored with an anti-
drug message, provided that such media can be utilized in a manner consistent with
the goals and parameters of the Media Campaign.”
The report also states the Committee’s belief “that without a convincing
demonstration that the Media Campaign has had an impact on youth drug use that
can be at least somewhat different from the general trends in such use, any increase
in funding for the Media Campaign cannot be justified at this time.” The Director
of ONDCP is directed to submit an evaluation plan for the Media Campaign for fiscal
years 2004-2008 to the Committees on Appropriations no later than 120 days after
this Act’s enactment. The Committee also is requiring “that no less than 77 percent
of funds be spent on advertising time and space.”57
The Senate Committee on Appropriations recommended an appropriation of
$174 million, $76 million less than the President’s request. Of the total, $100 million
is for continuation of the National Youth Anti-Drug Media Campaign; $7.2 million
is for the United States Anti-Doping Agency; $60 million is for the Drug-Free
Communities Program (including $1 million to continue the National Community
Anti-Drug Coalition Institute); $3 million is for the Counterdrug Executive
Secretariat; $1 million is for the National Drug Court Institute; $2 million is for
Performance Measures Development; and $800,000 is for United States dues to the
World Anti-Doping Agency. Noting that the current source of funding for this
account is direct appropriations, the Committee concurred with changing the name
of the account.
The committee report accompanying S. 1589 includes several directives related
to the National Media Campaign. According to the report:
Today, a large portion of the campaign’s budget pays for outside media and
advertising consultants and the Committee is concerned about the amount of
resources that are being consumed by these parties. The Committee has provided
$100,000,000 for the national media campaign and directs that no less than 80
percent of the funding provided be used for the purchase of advertising time and
space unless ONDCP submits and the House and Senate Committees on
Appropriations approves a request for reprogramming of the funds based on
clearly articulated principals and priorities. The Committee directs the General
Accounting Office to conduct a study to determine the extent to which outside
consultants are being used by the Media Campaign, the cost-effectiveness of this
method, and if this system is producing more effective ads that aid ONDCP in
its core mission.58
With regard to the campaign’s industry match program, under which federal
funds for paid advertising were to be matched dollar-for-dollar by industry, the
committee report states that:
57 H.Rept. 108-243, pp. 171-172.
58 S.Rept. 108-146, p. 143.

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CRS-46
It has come to the Committee’s attention however, that while ONDCP is
purchasing peak time for specific ads, they are agreeing to have that time and
space matched with different ads at different times. The Committee believes that
this violates the intent of Congress and directs ONDCP to provide a detailed
report to the House and Senate Committees on Appropriations regarding all
advertising, their placement and what matches are being provided by all media
in all markets. Further, the Committee directs ONDCP to more closely scrutinize
the matching proposals and to ensure that the one to one match more
appropriately mirrors the time and space that has been purchased.59
The report also states that “the Committee intends to rely on the scientifically
rigorous NIDA study to gauge [the advertising campaign’s] ultimate impact.”60
Unanticipated Needs. The account provides funds for the President to meet
unplanned and unbudgeted contingencies for national interest, security, or defense
purposes.
The President’s FY2004 budget proposes an appropriation of $1 million. This
is virtually the same amount as was appropriated in FY2003 ($993,000 after
rescission). The House and Senate Committees on Appropriations recommended and
the House passed the same appropriation as the President requested.
Title V: Independent Agencies
Table 9. Title V: Related Agencies Appropriations
(in millions of dollars)
FY2004
FY2004
FY2003
FY2004
FY2004
Agency
House
Senate
Enacted
Request
Enacted
Passed
Reported
National Transportation Safety
Board
72
72
77
73
Federal Election Commission
50
50
50
50
Election Assistance Commission
835
500
500
500
Federal Labor Relations Authority
29
30
30
30
Federal Maritime Commission
17
18
18
18
General Services Administration
1,222
464
426
615
Merit Systems Protection Board
34
36
36
36
Morris K. Udall Foundation
3
1
3
3
National Archives and Records
Administration
262
298
300
269
Office of Personnel Management
(total)
16,558
18,012
17,506
17,512
59 Ibid.
60 Ibid., p. 144.

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CRS-47
FY2004
FY2004
FY2003
FY2004
FY2004
Agency
House
Senate
Enacted
Request
Enacted
Passed
Reported
Government Payments for
Annuitants, Employees Health
Benefits
6,853
7,219
7,219
7,219
Government Payments for
Annuitants, Employee Life
Insurance
34
35
35
35
Payment to Civil Service
Retirement and Disability
Fund
9,410
9,987
9,987
9,987
Office of Special Counsel
12
14
14
14
United States Tax Court
37
40
40
40
Total, Related Agencies
19,151
19,555
19,021
*19,180
Source: United States House of Representative, Committee on Appropriations, House Report 108-243, Table:
Comparative Statement of Budget Authority, except Senate figures from Senate Committee on Appropriations,
Senate Report 108-146, Table: Comparative Statement of Budget Authority.
*The Senate Committee on Appropriations lists the Postal Service under the “Related Agencies” (“Independent
Agencies” in the Senate Report) Title, rather than as a separate title. For comparative purposes, the Postal
Service appropriation ($97 million) has been subtracted from the Senate’s total figure.
Federal Election Commission (FEC). The FEC administers federal
campaign finance law, including overseeing disclosure requirements, limits on
contributions and expenditures, and the presidential election public funding system;
the agency retains civil enforcement authority for the law. The Office of Election
Administration, which serves as a clearinghouse for information on voting laws and
procedures for state and local election officers, is another part of the FEC .
The President’s fiscal 2004 budget proposed an appropriation of $50.4 million
for the FEC, an increase of $898,000 above the fiscal 2003 appropriation of $49.5
million. The FEC, in its separate budget submission to Congress, concurred with the
Administration proposal, both in the request for overall appropriations and for 391
employees. The agency noted in its submission that the 1.8% increase over the 2003
appropriated amount represented “essentially a Current Services request,” reflecting
only an adjustment for inflation and salary and benefits increases but no additional
funds or staff for new programs or initiatives. The agency attributed the essentially
stable budget request to the greater efficiency resulting from mandatory electronic
filing and the new administrative fine and Alternative Dispute Resolution programs.
The House-passed bill contained the same $50.4 million funding level as
requested by the Administration and the agency, with a stipulation that no less than
$6.4 million be used for automated data processing systems. The House bill also
contained two legislative provisions added by the Appropriations Committee: to
extend the FEC’s administrative fines program by two years, through the end of
2005, and to allow reports filed by overnight delivery, priority, or express mail to be
considered as timely based on the postmark or, if by non-U.S. Postal Service carriers,
by the date delivered to that carrier.

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CRS-48
The bill reported by the Senate Appropriations Committee contained the same
$50.4 million recommended by the Administration, the FEC, and the House. The
Committee, however, did not include the House bill’s stipulation regarding spending
on data systems, nor did it include the legislative provisions in the House bill.
Federal Labor Relations Authority (FLRA). The FLRA serves as a
neutral party in the settlement of disputes that arise between unions, employees, and
federal agencies on matters outlined in the Federal Service Labor Management
Relations Statute; decides major policy issues; prescribes regulations; and
disseminates information appropriate to the needs of agencies, labor organizations,
and the public. The FLRA also engages in case-related interventions and training and
facilitates labor-management relationships. It has three components: the Authority
which adjudicates labor-management disputes; the Office of the General Counsel
which, among other duties, investigates all allegations of unfair labor practices filed
and processes all representation petitions received; and the Federal Service Impasses
Panel which resolves impasses which occur during labor negotiations between
federal agencies and labor organizations.
The President’s FY2004 budget proposes an appropriation of $29.6 million for
the FLRA, an increase of 3.0% over the $28.8 million appropriated in FY2003. The
House and Senate Committees on Appropriations recommended and the House
passed the same amount as the President requested.
Table 10. General Services Administration Appropriations
(in millions of dollars)
FY2004
FY2004
FY2003
FY2004
FY2004
Fund / Office
House
Senate
Enacted
Request
Enacted
Passed
Reported
Federal Buildings Fund
Appropriations
373
217
247
407
Limitations on
Obligations
6,567
6,634
6,558
6,772
Government-wide Policy
66
74
56
62
Operating Expenses
72
85
79
85
Office of Inspector General
38
39
39
39
Allowances and Office Staff
for Former Presidents
3
3
3
3
Electronic Government (E-
Gov) Fund
5
45
1
5
Election Reform Payments
and Reimbursements
665
—
—
GSA appropriations total
1,222
464
426
615
Source: United States House of Representative, Committee on Appropriations, House Report 108-243, Table:
Comparative Statement of Budget Authority, except Senate figures from Senate Committee on Appropriations,
Senate Report 108-146, Table: Comparative Statement of Budget Authority.

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CRS-49
General Services Administration (GSA).
The General Services
Administration administers federal civilian procurement policies pertaining to the
construction and management of federal buildings, disposal of real and personal
property, and management of federal property and records. It is also responsible for
managing the funding and facilities for former Presidents and presidential transitions.
S. 1589, as introduced and reported, recommends a total of $61.8 million for
government-wide policy and $85.1 million for operating expenses; $39.2 million for
the Office of Inspector General; $3.4 million for allowances and office staff for
former Presidents; and $5.0 million to remain available until expended for the
electronic government fund.
H.R. 2989, as introduced and reported, recommends a total of $56.4 million for
government-wide policy and $79.1 million for operating expenses; $39.2 million for
the Office of Inspector General; $3.4 million for allowances and office staff for
former Presidents; and $1.0 million to remain available until expended for the
electronic government fund.
The President’s FY2004 budget contained a request of $74.0 million for
government-wide policy and $85.1 million for operating expenses; $39.2 million
for the Office of Inspector General; $3.4 million for allowances and office staff for
former Presidents; $45.0 million for interagency electronic government initiatives;
and $17.6 million to be deposited into the Federal Consumer Information Center
Fund.
Federal Buildings Fund (FBF). Revenue to the FBF is the principal source
of funding. Congress, however, directs the GSA as to the allocation or limitation on
spending of funds.
S. 1589, as introduced and reported, recommends that an additional $407.0
million be deposited into the FBF, for a total of $6,717.3 million. Of this total,
$659.7 million shall remain available until expended for new construction, including
$204.6 million for nine courthouses. An additional $1,000.9 million is to remain
available until expended for repairs and alterations. This amount includes $208.2
million for repairs to five existing courthouses; $20.0 million to implement a glass
fragmentation program; $5.0 million to implement a chlorofluorocarbons program;
and amounts to provide such reimbursable fencing, lighting, guard booths, and other
facilities on private or other property not in federal ownership as may be appropriate
to enable the U.S. Secret Service to perform its protective functions.
H.R. 2989, as introduced and reported, recommends that an additional $247.4
million be deposited into the FBF, for a total of $6,557.5 million. Of this total,
$406.1 million shall remain available until expended for new construction. An
additional $1,010.5 million is to remain available until expended for repairs and
alterations. This amount includes $208.2 million for repairs to five existing
courthouses; $20.0 million to implement a glass fragmentation program; $5.0 million
to implement a chlorofluorocarbons program; and for funding any costs associated
with implementing security improvements in federal buildings.

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The President’s FY2004 budget requested that an additional $217.0 million be
deposited into the Federal Buildings Fund, for a total of $6,579.9 million. An
amount not to exceed $400.6 million was to remain available until expended for new
construction projects. An additional $1,012.7 million was to remain available until
expended for repairs and alterations. This amount included $217.2 million for
repairs to five existing courthouses; $20.0 million to implement a glass fragmentation
program; $5.0 million to implement a chlorofluorocarbons program; and “amounts
to provide such reimbursable fencing, lighting, guard booths, and other facilities on
private or other property not in Government ownership or control as may be
appropriate to enable the United States Secret Service to perform its protective
functions pursuant to 18 U.S.C. 3056.”
Electronic Government Fund. Senate appropriators recommended $5
million for the e-gov fund for FY2004, the same amount recommended and
ultimately approved for FY2003. House appropriators recommended only $1 million
for the e-gov fund for FY2004, and this was subsequently approved by the House.
The House committee report offered no explanation for the reduced amount. The
President’s budget for FY2004 had sought $45 million for the fund. The account
statement noted that the fund has been authorized by the E-Government Act of 2002,
which had previously been a matter of concern for appropriators.61 Under the terms
of the authorizing provision, the fund is administered by the Administrator of
General Services as a GSA account to support projects approved by the director of
OMB. No transfers of monies from the fund to federal agencies may be made until
10 days after a proposed spending plan and justification for each project to be
undertaken using such monies has been submitted to the Committees on
Appropriations.
Funding for the Electronic Government Fund was a somewhat contentious
matter between the President and Congress in FY2003, as it had been in FY2002.
On February 28, 2001, in advance of his proposed budget for FY2002, the President
released: A Blueprint for New Beginnings: A Responsible Budget for America’s
Priorities.
Intended as a 10-year budget plan, the Blueprint, among other
innovations, proposed the establishment of an electronic government account seeded
with “$10 million in 2002 as the first installment of a fund— that will grow to a total
of $100 million over three years— to support interagency electronic Government (e-
gov) initiatives.” Managed by OMB, the fund was foreseen as supporting “projects
that operate across agency boundaries,” facilitating “the development of a Public Key
Infrastructure to implement digital signatures that are accepted across agencies for
secure online communications,” and furthering “the Administration’s ability to
implement the Government Paperwork Elimination Act of 1998, which calls upon
agencies to provide the public with optional use and acceptance of electronic
information, services and signatures, when practicable, by October 2003.”62 About
one month later, on March 22, OMB Deputy Director Sean O’Keefe announced that
61 See 116 Stat. 2899 at 2906; 44 U.S.C. 3604.
62 U.S. Executive Office of the President, Office of Management and Budget, A Blueprint
for New Beginnings, pp. 179-180.

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the Bush Administration had decided to double the amount to be allocated to the e-
gov fund, bringing it to $20 million.63
As included in the President’s FY2002 budget, the fund was established as an
account within the General Services Administration (GSA), to be administered by the
Administrator of General Services “to support interagency projects, approved by the
Director of the Office of Management and Budget, that enable the Federal
Government to expand its ability to conduct activities electronically, through the
development and implementation of innovative uses of the Internet and other
electronic methods.”
The President’s initial request for the fund was $20 million, to remain available
until September 30, 2004. Congress, however, appropriated $5 million for the fund
for FY2002, to remain available until expended.
Appropriators specified that
transfers of monies from the fund to federal agencies could not be made until 10 days
after a proposed spending plan and justification for each project to be undertaken
using such monies had been submitted to the Committees on Appropriations.
Expressing general support for the purposes of the fund, they also recommended, and
both chambers agreed, that the administration work with the House Committee on
Government Reform and the Senate Committee on Governmental Affairs to clarify
the status of its authorization.
The President’s budget for FY2003 recognized “GSA as operator of the official
federal portal for providing citizens with one-stop access to federal services via the
Internet or telephone” and, therefore, a key agency in implementing the President’s
e-gov vision, which will “require cross-agency approaches that permit citizens,
businesses, and state and local governments to easily obtain services from, and
electronically transact business with the federal government.” In this regard, an
Administration interagency Quicksilver E-Gov Task Force, according to the budget,
“identified 23 high priority Internet services for early development.”
Seeking $45 million for the e-gov fund, the budget acknowledged that this
amount was “a significant increase over the $20 million requested in 2002,” but
noted that the request “is supported by specific project plans developed by the
Quicksilver Task Force.”64 Furthermore, according to the fund account statement,
these monies “would also further the Administration’s implementation of the
Government Paperwork Elimination Act (GPEA) of 1998, which calls upon agencies
to provide the public with optional use and acceptance of electronic information,
services, and signatures, when practicable, by October 2003.”
The House appropriators again rejected the amount requested by the President
and recommended $5 million for the fund, reiterating, as previously, that transfers of
monies from the fund to federal agencies could not be made until 10 days after a
proposed spending plan and justification for each project to be undertaken using such
63 William Matthews, “Bush E-gov Fund to Double,” Federal Computer Week, vol. 15, Mar.
26, 2001, p. 8.
64 U.S. Office of Management and Budget, Fiscal Year 2003 Budget of the U.S. Government,
pp. 386-387.

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CRS-52
monies had been submitted to the Committees on Appropriations. The House
Committee also declined to recommend an appropriation for the fund as a GSA
account, but did fund it as an account under the jurisdiction of the Office of
Management and Budget within the Executive Office of the President.65 Senate
appropriators, however, recommended the full $45 million requested by the
President. Their report stated that OMB “would control the allocation of the fund
and direct its use for information systems projects and affect multiple agencies and
offer the greatest improvements in access and service.”66 Final funding, as provided
by P.L. 108-7, nonetheless, was $5 million.
National Archives and Records Administration (NARA). The custodian
of the historically valuable records of the federal government since its establishment
in 1934, NARA also prescribes policy and provides both guidance and management
assistance concerning the entire life cycle of federal records. It also administers the
presidential libraries system; publishes the laws, regulations, and presidential and
other documents; and assists the Information Security Oversight Office (ISOO),
which manages federal security classification and declassification policy; and the
National Historical Publications and Records Commission (NHPRC), which makes
grants nationwide to help nonprofit organizations identify, preserve, and provide
access to materials that document American history.
Senate appropriators recommended $276.674 million for NARA for FY2004,
about $29 million less than the President’s request and approximately $23 million
less than the House appropriators’ recommendation. Of this amount recommended
in the Senate, $258.191 million is proposed for operating expenses; $13.483 million
for repairs and restoration, with $2.025 million specified for the construction of a
regional archival facility in Alaska and $5 million designated for repair of the plaza
of the Lyndon Baines Johnson Presidential Library; and $5 million for the NHPRC.
The House approved the funding for NARA recommended by House
appropriators. This included a total amount of $299.8 million for NARA for
FY2004, which is about $5 million less than the President’s request, but about $23
million more than the amount recommended by Senate appropriators. Of this amount
approved by the House, $255.2 million is proposed for NARA operating expenses,
which is almost $39 million less than the President requested for this account.
However, some of these funds are included in a new electronic records archive
account, for which the Committee had recommended $35.9 million. The President’s
requested amount for repairs and restoration was approved, as was twice the amount
requested by the President for the NHPRC.
The President’s budget requested $305.6 million for FY2004, which was
slightly more than $42 million above the FY2003 appropriation for NARA. Of the
requested amount, $294.1 million was sought for operating expenses, $6.5 million
for repairs and restoration, and $5 million for the NHPRC grants program.
65 U.S. Congress, House Committee on Appropriations, Treasury, Postal Service, and
General Government Appropriations Bill, 2003, a report to accompany H.R. 5120, 107th
Cong., 2nd sess., H.Rept. 107-575 (Washington: GPO, 2002), pp. 64, 83.
66 S.Rept. 107-212, p. 77.

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CRS-53
Compared with FY2003 funding, increased monies were being sought for operating
expenses; amounts sought for the latter two accounts were below the amounts
appropriated for them for FY2003.
Merit Systems Protection Board (MSPB). The MSPB serves as guardian
of the federal government’s merit-based system of employment. The agency carries
out its mission by hearing and deciding appeals from federal employees of removals
and other major personnel actions. The MSPB also hears and decides other types of
civil service cases, reviews OPM regulations, and conducts studies of the merit
systems. The agency’s efforts are to assure that personnel actions taken involving
employees are processed within the law and that actions taken by OPM and other
agencies support and enhance federal merit principles.
The President’s FY2004 budget proposes an appropriation of $35.5 million for
the MSPB. The request is 11.6% more than the $31.8 million appropriated in
FY2003. The MSPB budget submission states that the amount requested includes
“$75,000 to provide for employee and managerial development opportunities” and
“$100,000 to comply with the Accountability of Tax Dollars Act of 2002, Public Law
107-289, which requires audited financial statements for agencies with over
$25,000,000 in appropriated funds in their budget.”67 According to the budget
submission:
Beginning in fiscal year 2004, at the request of [OMB], the [MSPB] is not
requesting funds be transferred from the Civil Service Retirement and Disability
Trust Fund. Instead, the funding previously supplied from the Trust Fund for
adjudication of Civil Service Retirement appeals is being requested as part of the
regular appropriation total of $35,503,000. OMB has recommended this change
to simplify the financial record keeping for both the [MSPB] and the Civil
Service Retirement and Disability Trust Fund. We checked with the Office of
Personnel Management, which has responsibility for the Trust Fund, and they
have no objection to this change.68
The House and Senate Committees on Appropriations recommended and the
House passed an appropriation of $32.9 million, $2.6 million less than the
President’s request. In addition, up to $2.6 million for administrative expenses could
be transferred from the Civil Service Retirement and Disability Fund to adjudicate
retirement appeals. According to the House committee report accompanying H.R.
2989
The decrease from the President’s request reflects the Committee’s decision to
continue the practice of appropriating funds to MSPB from the Civil Service
Retirement and Disability Fund rather than discontinuing this practice as
requested by the President; this request has not been adequately justified.69
67 U.S. Merit Systems Protection Board, Fiscal Year 2004 Budget Justification, Feb. 3, 2003,
p. 6.
68 Ibid., p. 5.
69 H.Rept. 108-243, pp. 191-192.

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CRS-54
Office of Personnel Management (OPM).
The budget for OPM is
comprised of budget authority for both permanent and current appropriations. This
report discusses the budget authority for current appropriations. The agency is
responsible for administering personnel functions. The OPM helps agencies to
develop merit-based human resources management accountability systems to support
their missions.
The Strategic Human Resources Policy Division designs and
develops human resources policies and strategies linked to agency accomplishment
of missions. The Human Capital Leadership and Merit Systems Accountability
Division assists agencies in implementing and assessing human capital strategies.
The Human Resources Products and Services Division supports federal agencies by
administering retirement and insurance programs, providing personnel investigation
services, managerial and executive training, and other human resources services.70
The Office of Inspector General (OIG) conducts audits, investigations, evaluations,
and inspections throughout the agency and may issue administrative sanctions related
to the operation of the Federal Employees Health Benefits Program.
The President’s FY2004 budget proposes an appropriation of $18.0 billion for
OPM. This total includes discretionary funding of $118.7 million71 for salaries and
expenses and $1.5 million for OIG salaries and expenses. It also includes mandatory
funding of $7.5 billion for the government payment for annuitants of the employees
health benefits program,72 $35.0 million for the government payment for annuitants
of the employee life insurance program, and $10.0 billion for payment to the civil
service retirement and disability fund. Included in this total as well are trust fund
transfers of $135.9 million73 for salaries and expenses and $14.4 million74 for OIG
salaries and expenses. (In FY2003, $120.8 million for salaries and expenses and
$10.9 million for OIG salaries and expenses were transferred from trust funds.)
According to OPM’s budget submission, the $118.7 million requested for
salaries and expenses “includes $111,748,000 in annual funds [for such things as
enhanced information technology support and competitive sourcing studies],
$4,500,000 in no-year funds for e-Government (e-Gov) projects, and $2,500,000 to
70 U.S. Office of Personnel Management, Congressional Budget Justification; Annual
Performance Plan Fiscal Year 2004, Feb. 2003, p. 3. (Hereafter referred to as OPM Budget
Justification.)
71 Of this total of $118,748,000, $2,000,000 shall remain available until expended for the
cost of the enterprise human resources integration project, $2,500,000 shall remain available
until expended for the cost of leading the government-wide initiative to modernize federal
payroll systems and service delivery, and $2,500,000 shall remain available through
September 30, 2005 to coordinate and conduct program evaluation and performance
measurement.
72 This was the amount of funding estimated in the FY2004 budget. OPM reported to the
House Appropriations Committee that funding of $7.2 billion would be needed.
73 Of this total of $135,914,000, $36,700,000 shall remain available until expended for the
cost of automating the retirement record keeping systems.
74 This money is for administrative expenses to audit, investigate, and provide other
oversight of OPM’s retirement and insurance programs.

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CRS-55
remain available through the end of FY2005 to coordinate and conduct program
evaluation and performance management.”75
With regard to the OIG, the budget states that the amount requested
will finance more audit staff, special agent criminal investigators, associated
analytical staff, and improved information systems. OPM expects to reduce the
audit cycle from 5 years to 3.6 years for community-related carriers. Recoveries
are expected to increase by $16 million annually as a result.76
The OPM budget request is 8.8% more than the $16.6 billion appropriated in
FY2003. Specifically, it is 7.7% less than the $128.6 million appropriated in FY2003
for salaries and expenses; 0.7% less than the $1.5 million for OIG salaries and
expenses; 5.3% more than the $6.9 billion for the government payment for annuitants
of the employees health benefits program; 2.9% more than the $34.0 million for the
government payment for annuitants of the employee life insurance program; and
6.1% more than the $9.4 billion for payment to the civil service retirement and
disability fund.77
The House Committee on Appropriations recommended and the House passed
an appropriation of $119.5 million for salaries and expenses ($750,000 more than the
President’s request), of which $2 million would be for the cost of the enterprise
human resources integration project; $2.5 million would be for the cost of leading the
government-wide initiative to modernize federal payroll systems and service
delivery; and $2.5 million would be to coordinate and conduct program evaluation
and performance measurement. The Committee recommended the same amounts as
the President requested for OIG salaries and expenses, the government payment for
annuitants of the employees health benefits program, the government payment for
annuitants of the employee life insurance program, and payment to the civil service
retirement and disability fund. In addition, the Committee recommended trust fund
transfers of $126.9 million for salaries and expenses, $9.1 million less than the
President requested, and $14.4 million for OIG salaries and expenses, the same
amount as the President requested. The committee report accompanying H.R. 2989
states that
The increase of $750,000 above the President’s request is to provide additional
funding for the ongoing ‘retirement readiness’ project being done by OPM in
conjunction with the International Foundation for Retirement Education
(InFRE)... The Committee directs OPM to award this money to InFRE as a grant
75 OPM Budget Justification, p. 5.
76 FY2004 Budget, Appendix, p. 974.
77 The amounts of $6,853,000,000; $34,000,000; and $9,410,000,000 for FY2003 are from
P.L. 108-7. OPM notifies the Secretary of the Treasury of the “such sums as may be
necessary” to fund these accounts each fiscal year. The FY2004 estimates for these
accounts are $7,219,000,000; $35,000,000; and $9,987,000,000 (from the House Committee
on Appropriations Table: Presidents Request with Outlays, FY2004).

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CRS-56
or contract, and to report to the Committee on the progress of this project no later
than 60 days after enactment of this Act.78
The report also “urges the Director of OPM to certify that any transfer of DSS
[Defense Security Service] functions to OPM will not have a detrimental impact on
the ability of OPM to handle its current caseload,” directs OPM to “notify the
Committees if any research, audit, or investigation regarding PBMs [pharmacy
benefit managers] has been delayed or terminated at the formal or informal request
of another Federal agency” by September 1, 2003, encourages OPM to complete the
comprehensive outside audit to determine the true cost of mandated services under
the Federal Employees Health Benefits Program (FEHBP) and “promptly submit a
report of the results to the Committee,” and “directs OPM to consider Hampshire and
Hampden counties [in Massachusetts] for inclusion into the Hartford [CT] Locality
Pay Area.”79
The Committee directs OPM
to conduct a study in both the aggregate and by State to: (1) determine the
approximate number of Federal employees and retirees who are eligible to
participate in the FEHBP, but who are not covered by this program or by any
other health insurance program; (2) the principal reasons why these individuals
do not obtain health insurance; and (3) by which agencies these people are
employed and at which pay grades, levels, or rates of pay. The results of this
study shall be submitted to the Committees on Appropriations no later than
September 30, 2004.80
The
Senate
Committee
on
Appropriations
recommended
the
same
appropriations as the President requested. The salaries and expenses appropriation
would be allocated in the same manner as the House Committee recommended. Of
the amount recommended for transfer from the trust funds, $36.7 million would
remain available until expended for the cost of automating the retirement
recordkeeping systems.
In its report accompanying S. 1589, the Committee
addressed OPM’s ongoing program to modernize its retirement system which began
in 1997. According to the report:
Two years ago, the Committee recommended that OPM reach out to GAO for
guidance and support because OPM could benefit from the experiences that GAO
has documented with other Federal agency modernization projects. OPM did not
act on the Committee’s suggestion, therefore, last year, the Committee directed
OPM to conduct quarterly meetings with GAO on the progress of the IT
modernization project. These meetings did not occur quarterly. Instead only one
meeting occurred in 2002 and none in 2003. The Committee is now aware that
this multi-year effort has been plagued with problems. The Committee is
disappointed by this lack of cooperation and therefore directs GAO to do a
78 H.Rept. 108-243, p. 196.
79 H.Rept. 108-243, pp. 197-198.
80 H.Rept. 108-243, p. 198.

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CRS-57
comprehensive audit on the problems and any mismanagement of the
modernization project.81
Human Capital Performance Fund. The President’s FY2004 budget
proposes an appropriation of $500 million for this new fund which
is designed to create performance-driven pay systems for employees and
reinforce the value of employee performance management systems.
The
Administration proposes providing additional pay over and above any annual,
across-the-board pay raise to certain civilian employees based on individual or
organizational performance and/or other critical agency human capital needs.
Ninety percent of funds appropriated would be distributed to agencies on a pro
rata basis, upon OPM approval of an agency’s plan. The remainder, and any
amount withheld from agencies due to inadequate plans, would be allocated at
the discretion of OPM.82
The House Committee on Appropriations recommended and the House passed
an appropriation of $2.5 million, $497.5 million less than the President’s request.
Obligation of the funding is contingent upon legislation authorizing the creation of
the fund within OPM.83 No funds would be available until the OPM Director notifies
the relevant subcommittees of jurisdiction of the Committees on Appropriations of
the approval of a performance pay plan for an agency and the prior approval of the
subcommittees has been attained. The Committee directs OPM “to report annually
to the Committees on Appropriations on the performance pay plans that have been
approved, and the amounts that have been obligated or transferred.”84
The Senate Committee on Appropriations did not recommend an appropriation
for the fund. “The Committee believes that an initiative of this type should be
budgeted and administered within each individual agency,” according to the report
accompanying S. 1589.85
Office of Special Counsel (OSC).
The agency investigates federal
employee allegations of prohibited personnel practices and, when appropriate,
prosecutes matters before the Merit Systems Protection Board; provides a channel for
whistle blowing by federal employees; and enforces the Hatch Act. In carrying out
the latter activity, the OSC issues both written and oral advisory opinions. The OSC
may require an agency to investigate whistle blower allegations and report to the
Congress and the President as appropriate.
The President’s FY2004 budget proposes an appropriation of $13.5 million for
the OSC, an increase of 9.2% over the $12.4 million appropriated in FY2003.
81 S.Rept. 108-146, pp. 162-163.
82 FY2004 Budget, Appendix, p. 973.
83 Creation of the Human Capital Performance Fund is proposed at Section 1111 of H.R.
1588, the National Defense Authorization Act for FY2004. See CRS Report RL31954, Civil
Service Reform: Analysis of the National Defense Authorization Act for FY2004.
84 H.Rept. 108-243, p. 200.
85 S.Rept. 108-146, p. 165.

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CRS-58
According to the budget, the funding “will enable OSC to continue its efforts to
reduce its long-standing case processing backlogs .... This request provides funding
for seven additional full time staff in [the Hatch Act and Disclosure Units] to address
growing backlog concerns.”86
The House and Senate Committees on Appropriations recommended and the
House passed the same appropriation as the President requested.
Title VI: General Provisions
This section of the report discusses, briefly, general provisions such as
government-wide guidance on basic infrastructure-like policies. Examples are
provisions related to the Buy America Act, drug-free federal workplaces, and
authorizing agencies to pay GSA bills for space renovation and other services which
are annually incorporated into the Treasury and General Government appropriations
legislation. Quite frequently, additionally, there have been provisions which relate
to specific agencies or programs. For both Transportation/Treasury-related general
provisions and government-wide general provisions, with noted exceptions, the
sections discussed here will be those which are new or contain modified policies.
Title VII of H.R. 2989 and Title VI of S. 1589 contain these provisions. It should
be noted that there are also general provisions which relate only to agencies and
accounts within the bill (Title VI, H.R. 2989 and Title V, S. 1589).
The Administration’s proposed language for government-wide general
provisions is found the Appendix.87 Most of the general provisions continue language
which has appeared under that title for several years. For an array of reasons,
Congress has determined that reiterating the language is preferable to placing the
provisions in permanent law.
The Administration is recommending dropping several such provisions. The
provisions are shown in Table 11.
86 FY2004 Budget, Appendix, p. 1091.
87 FY2004 Budget, Appendix, pp. 9-13.

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CRS-59
Table 11. Government-wide General Provisions
Administration Proposals
H.R. 2989, as passed
S. 1589, as reported
House
Repeats recommendation
Sec. 709. Continue the
Sec. 609. Same as House
eliminating of the provision
provision prohibiting
language.
(section 609, FY2003) which
payments to persons filling
prohibits payment to political
positions for which they have
appointees functioning in jobs
been nominated after the
for which they have been
Senate has voted not to
nominated, but not confirmed.
approve the nomination.
This provision has been in the
bill for at least 20 years. The
previous administration also
recommended its elimination.
Recommended elimination of
Sec. 712. Continue the
Sec. 612. Same as House
the provision (section 612,
provision prohibiting the use
language.
FY2003) which prohibits use
of funds for enforcing
of funds to “implement,
regulations disapproved in
administer, or enforce any
accordance with the
regulation” which has been
applicable law of the United
disapproved through statutorily
States.
authorized means. If the
provision were eliminated,
conceivably the executive
could continue regulatory
activities which Congress had
disapproved, through
resolution of disapproval or the
Congressional Review Act.
The provision, in the bill since
the early 1980s, had been
recommended for elimination
in FY2002 and by the previous
administration also.
Recommends elimination of
provision banning use of funds
to Customs Service for
importation or release in the
United States of goods found
to be manufactured by forced
or indentured child labor
(FY2003, Sec. 619). This
provision may reappear under
the Department of Homeland
Security appropriation.

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CRS-60
Administration Proposals
H.R. 2989, as passed
S. 1589, as reported
House
Recommends, elimination of
Sec. 719. Continue the
Sec. 619. Same as House
provision (section 621,
provision prohibiting federal
language.
FY2002) which requires that
training not directly related to
no funds may be obligated or
the performance of official
expended for employee
duties.
training not directly related to
the employee’s official duties;
that may induce high levels of
emotional response or
psychological stress in some
participants; that fails to
inform re course content or
post-course evaluation; that
contains methods or content
“associated with religious or
quasi-religious belief systems
or ‘new age’ belief systems;”
and that is offensive to, or
designed to change,
participants’ personal values or
lifestyles away from the
workplace. Elimination of
language in the bill since the
mid-1990s, was requested
previously by both the Bush
Administration and the Clinton
Administration.
Section 622 (FY2003)
Sec. 720. Continue the
Sec. 620. Same as House
prohibits the use of funds to
provision prohibiting the
language.
require and execute employee
expenditure of funds for
non-disclosure agreements
implementation of
without those agreements
agreements in non-disclosure
having whistle-blower
policies unless certain
protection clauses. The Bush
provisions are included.
proposal repeats their FY2002
and FY2003 requests for
elimination of that provision,
which has been in the bill for
over ten years.
Section 625 (FY2003) requires
Sec. 723. Continue the
Sec. 623. Same as House
approval by the Committees on
provision prohibiting funds to
language.
Appropriations of release of
be used to provide non-public
any “non-public” information
information such as mailing
such as mailing or telephone
or telephone lists to any
lists to any person or any
person or organization
organization outside the
outside the government
federal government. The Bush
without the approval of the
Administration is repeating
Committee on
their request for its elimination.
Appropriations.

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CRS-61
Administration Proposals
H.R. 2989, as passed
S. 1589, as reported
House
Federal employees in executive
Sec. 725. Continue the
Sec. 625. Same as House
agencies are required (section
provision directing agency
language.
627, FY2003) to “use official
employees to use official time
time in an honest effort to
in an honest effort to perform
perform official duties.” That
official duties.
requirement, in the bill since
FY1999, has been slated for
elimination by both the Bush
and Clinton budget proposals.
The argument has been that the
ethics statutes, in fact, place
that same requirement on all
federal personnel.
Proposed section 630 would
amend provisions of the
Federal Employees
Compensation Act (FECA)
which relates to workmen’s
compensation available to
federal employees. [See
discussion below under
“Federal Employees Workers’
Compensation Program
(FECA)” section.]
Proposed section 631 would
authorize funding if provisions
like those of the proposed
Managerial Flexibility Act of
2001 (S. 1612, 107th
Congress), relating to the
accrual of funds for the
payment of federal pensions
and post-retirement health
benefits, were enacted. Similar
legislation has not yet been
introduced in the 108th
Congress.
Proposed section 632 would
authorize the Administration to
transfer up to 5% from any
appropriation, with certain
limitations.
Sec. 628. A new section
which would prohibit use of
funds to operate an online
employment information
service for the federal
government under certain
circumstances.

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CRS-62
Administration Proposals
H.R. 2989, as passed
S. 1589, as reported
House
Sec. 736. A new provision
Sec. 640. Similar to House
which would require agencies
language.
to evaluate the
creditworthiness of an
individual before issuing the
individual a government
travel charge card and would
limit agency actions
accordingly.
Proposed section 634 would
Sec. 737. A new provision
authorize interagency funding
which would permit
of the National Oceanographic
interagency funding of the
Partnership Program Office.
National oceanographic
Partnership Program Office
and the Coastal America
program and would require a
report.
Sec. 738. A new provision
which would extend the
Federal Election
Commission’s administrative
fine program through
December 31, 2005.
Sec. 739. A new provision
which would allow for the
timely filing of reports with
the Federal Election
Commission using overnight
delivery, priority, or express
mail.
Sec. 740. Would provide that
Sec. 636. Would provide for
the adjustment in rates of
a 4.1% increase.
basic pay for federal
employees under statutory
pay systems taking effect in
fiscal year 2004 shall be an
increase of 4.1%.
Sec. 741. A new provision
Sec. 642. Similar to House
which would require a report
language
from each agency on
competitive sourcing
activities.
Sec. 742. Sense of the
Congress that no pay
localities, as defined for the
General Schedule, would be
disestablished.
Sec. 743. Shifts $1 million
from one California Bay Area
transit project to another.

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CRS-63
Administration Proposals
H.R. 2989, as passed
S. 1589, as reported
House
Sec. 744. Appropriates $63
million for the Essential Air
Service program, replacing
funding from the Airport and
Airway Trust Fund that was
stricken on a point of order.
Sec. 745. A new provision
which would change travel
restrictions to Cuba.
Sec. 746. A new provision
which would prohibit use of
funds to enforce any
restriction on remittances to
nationals of Cuba or Cuban
households.
Sec. 747. A new provision
which would prohibit use of
funds in overturning the July
31, 2003 judicial ruling
related to IBM Person
Pension Plan.
Sec. 748. A new provision
which would prohibit use of
funds to implement revision
to OMB Circular A-76.
Sec. 749. A new provision
which would prohibit use of
funds to implement,
administer, or enforce Code
of Federal Regulations
amendments relating to
specific licenses for “people-
to-people” educational
exchanges.
Sec. 638. A new provision
which would prohibit the
purchase of a product or
service offered by the Federal
Prison Industries, Inc., unless
the agency making such
purchase determines that such
product or service provides
the best value.
Sec. 639. A new provision
which would allow the use of
appropriated funds for
official travel by federal
departments and agencies to
participate in the fractional
aircraft ownership pilot
program.

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CRS-64
Administration Proposals
H.R. 2989, as passed
S. 1589, as reported
House
Sec. 641. A new provision
which would prohibit the
expenditure of funds for the
acquisition of additional
federal law enforcement
training facilities.
Proposed section 635 would
allow the Administration to
transfer funds between
accounts funding operations in
the Executive Office of the
President. In previous funding
cycles, the Administration had
requested that all of the
accounts within te Executive
Office of the President be
consolidated into one account.
Congress rejected that
proposal.
Proposed section 636 would
establish a Human Capital
Performance Fund to be
administered by the Office of
Personnel Management
(OPM). See discussion above
related to OPM funding.
Proposed section 637 would
change the pay system for the
Senior Executive Service.
Federal Personnel Issues
General Schedule Pay. Under the Federal Pay Comparability Act of 1990
(FEPCA), federal white collar employees, paid under the General Schedule and
related salary systems, are to receive annual adjustments based on two separate
mechanisms. The first is the adjustment to base pay which is based on changes in
private sector salaries as reflected in the Employment Cost Index (ECI). The rate of
pay adjustment is supposed to be the percentage rate of change in that element of the
ECI, minus 0.5. Under that formula, for January 2003, the base pay adjustment was
3.1%. On December 31, 2002, the President signed an Executive Order establishing
the salary schedules for federal civilian personnel effective January 2003.88 Under
the provisions of Section 637, Division J, P.L. 108-7, the full pay increase for the
General Schedule is 4.1%. There was no stipulation as to how the additional 1%
would be apportioned between base pay and locality-based comparability payments.
The payment will be retroactive to January 2003. On March 21, it was announced
88 U.S. National Archives and Records Administration, “Executive Order 13282 —
Adjustments of Certain Rates of Pay,” Federal Register, vol. 68, January 8, 2003
(Washington: GPO, 2003), pp. 1133-1142. E. O. 13282, dated December 31, 2002.

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CRS-65
that the additional 1% would be applied exclusively to locality-based comparability
payments.89
The President’s budget proposes a federal civilian pay increase of 2.0% in
January 2004.90 However, the proposal does not indicate how the pay increase would
be split between basic pay and locality-based payments for the General Schedule and
related pay systems. He submitted an alternative plan at the end of August which
would provide a 1.5% increase in basic pay and a 0.5% increase in locality pay.
Unless Congress acts to enact other rates, the President’s plan will be effective in
January 2004.
Section 601 of the FY2004 budget resolution (H. Con. Res. 95, H.Rept. 108-71)
contained a Sense of the Senate provision stating that the civilian and military pay
increases should be in parity. The H.R. 2989, as passed by the House and S. 1589,
as reported would establish a January 2004 pay increase, at a rate of 4.1%, for
civilian employees, equal to the Administration’s proposal for the military. It would
be left to the President’s discretion as to how the increase would be split between
basic and locality pay.
Federal Wage System. The Federal Wage System (FWS) is designed to
compensate the federal blue collar, or skilled labor, force at rates prevailing in local
wage areas for like occupations. If the statutory system were allowed to be managed
as planned, the wage rates and the rates of adjustment in the over 130 wage areas
would vary, according to the labor costs and compensation in the private sector. For
the last several years, Congress has limited the rates of adjustment, based on the rates
of adjustment for the General Schedule (P.L. 108-7, Division J, Section 613). Part
of the rationale for that decision is that, in certain high cost areas, some FWS wages
would exceed the salaries paid to General Schedule supervisors. Wages in lower
cost areas will be allowed to increase according to the findings of the wage surveys
but the high cost area wages will be capped.
P.L. 107-117 extends the Monroney Amendment out-of-area survey application
to Department of Defense personnel.
Senior Executive Service Salaries.
Section 637 of the President’s
proposed General Provisions would amend the statute governing the determination
of salary levels for the Senior Executive Service. It would increase the level at which
the salaries are capped, both for base pay and for the application of locality pay. It
would eliminate the 6-tier system with a pay band system. It also would adjust
language related to pay for performance.91 No similar language appears in either the
House-passed or Senate-reported versions.
89 U.S. National Archives and Records Administration, “Executive Order 13291 — Further
Adjustment of Certain Rates of Pay,” Federal Register, vol. 68, March 25, 2003
(Washington: GPO, 2003), pp. 14525-14526. E. O. 13291, dated March 21, 2003.
90 FY2004 Budget, Analytical Perspectives, p. 287.
91 FY2004 Budget, Appendix, p. 13.

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Human Capital Performance Fund. The Administration’s FY2004 pay
proposal would combine a 2% across-the board increase with a performance
component. A $500 million fund would be set aside government-wide to allow
managers to reward top-performing individuals with permanent increases in base
pay.92
Members of Congress, Judges, and Other Officials. There are no
provisions in either the House-passed or Senate-reported versions which address the
pay of Members of Congress, Judges, or other federal officials. If Congress is
legislatively silent, the annual adjustment goes into effect automatically. A pay
adjustment of 2.2% is scheduled for the officials of the three branches effective
January 2004.
Under the Ethics Reform Act of 1989, as amended, pay adjustments for federal
officials, including Members of Congress and judges, are also based on ECI
calculations, but for a different 12-month period. The ECI calculations dictated a pay
adjustment in January 2003 of 3.3%. However, the statute limits those adjustments
to the rate of adjustment for base pay of the General Schedule. Therefore, since the
General Schedule base pay was adjusted at the rate of 3.1%, 3.1% is the maximum
rate of adjustment in salaries of federal officials for January 2003. Because the
mechanism described above is automatic, no bill language is necessary to establish
the pay adjustment.93
Unlike that for Members of Congress and executive branch officials, the annual
pay increase must be specifically authorized for judges. The language permitting the
judges to receive the January 2003 increase was reported by the Senate Committee
on Appropriations as section 304 of S. 2778. However, Congress adjourned prior to
enactment. Therefore, the judges did not receive the 3.1% adjustment as of January
1, 2003. The 108th Congress enacted P.L. 108-694 for the purpose of permitting the
judges to receive the increase retroactive to the first of the year. At no time, since the
authorization was required, have the judges received lower adjustments than the other
officials.
President. Pursuant to the Treasury and General Government Appropriations
Act, 2000 (P.L. 106-58), effective noon, January 20, 2001, the President receives a
salary of $400,000 per annum. Since 1969, Presidents had been paid a salary of
$200,000. No further action on presidential pay is expected. Former Presidents
92 FY2004 Budget, Appendix, p. 12 and Analytical Perspectives, p. 287.
93 See also, CRS Report RL30014, Salaries of Members of Congress: Current Procedures
and Recent Adjustments and CRS Report 97-1011, Salaries of Members of Congress:
Payable Rates and Effective Dates, 1789-2001, both by Paul E. Dwyer. Also see, CRS
Report RS20388, Salary Linkage: Members of Congress and Other Federal Officials; CRS
Report RS20278, Judicial Salaries: Current Situation; and CRS Report 98-53, Salaries of
Federal Officials, by Sharon S. Gressle.
94 P.L. 108-6; H.R. 16; February 13, 2003; 117 Stat. 10.

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receive a pension equal to the rate of pay for Cabinet Secretaries (currently $171,900)
and the pension is adjusted automatically as those pay rates are changed.95
Federal Employees Workers’ Compensation Program (FECA). The
Federal Employees Compensation Act (FECA) provides workers’ compensation
benefits for Federal employees injured on the job. Under current law (5 U.S.C. Sect.
8147), the direct costs of these benefits are reimbursed via transfers from the budgets
of each Federal agency to the Labor Department, which administers the program and
disburses the benefits. The costs of administration are covered by appropriation
directly to the Labor Department.
The Administration is again proposing various changes in FECA that it
broached in the 107th Congress. The aspect that would affect agency budgets
government-wide is to charge administrative costs in the same manner as benefit
costs, i.e. through the appropriation of each employing agency. The stated intention
is to make each agency explicitly bear the full cost of their employees’ claims, thus
“bolstering their incentive to improve workplace safety.”
The administrative
surcharge would be around 3.5%
of benefit costs (calculated from the
Administration budget for FY2004, which contemplates $88 million in
administrative costs to service $2,532 million in program benefits). Most of the
surcharge would be paid by the two agencies that account for more than 60% of
FECA claims: the U.S. Postal Service and the Defense Department. (However, the
Postal Service already pays its share pursuant to 5 U.S.C. 8147(c).) No similar
language is found in either the House or Senate bill.
Competitive Sourcing of Federal Activities96
In its “Statement of Administration Policy” on H.R. 2989, the Administration
reiterated its support for competitive sourcing, objected to an amendment that would
hinder competitive sourcing, and stated that the President’s senior advisers would
recommend that the President veto the bill if it contains a prohibition on funding for
public-private competitions.97
Competitive sourcing, which applies only to
commercial activities, is one of the components of the President’s Management
Agenda (PMA). Since February 2001, OMB has implemented several initiatives
designed to promote competitive sourcing, including revising OMB Circular A-76
(May 29, 2003) and requiring agencies to submit inventories of their inherently
governmental activities. Circular A-76 provides policy and guidance for public-
private competitions.
95 See CRS Report RS20114, Salary of the President Compared with That of Other Federal
Officials, by Sharon S. Gressle.
96 Prepared by L. Elaine Halchin, Analyst in American National Government, Government
and Finance Division.
97 Executive Office of the President, Office of Management and Budget, “Statement of
Administration Policy, H.R. 2989 – Departments of Transportation and Treasury and
Independent Agencies Appropriations Bill, FY 2004,” Sept. 4, 2003, available at
[www.whitehouse.gov/omb/legislative/sap/108-1 /hr2989 sap- h.pdf], visited Sept. 8, 2003.

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By a vote of 220 to 198 (Roll call no. 487), the House approved an amendment,
H.Amdt. 379, concerning competitive sourcing. The amendment would prohibit
using any of the funds made by available by H.R. 2989 for the implementation of the
May 29, 2003 revision to Office of Management and Budget (OMB) Circular A-76.98
Depending upon how this section (section 748) is interpreted, some, or all, federal
departments and agencies could revert to the 1999 revision to the circular.
Cuba Sanctions99
Since the early 1960s, U.S. policy toward Cuba has consisted largely of efforts
to isolate the Communist government of Fidel Castro through comprehensive
economic sanctions, including a trade embargo and prohibitions on U.S. financial
transactions with Cuba, including travel. The comprehensive sanctions were made
stronger by congressional initiative with the 1992 passage of the Cuban Democracy
Act (P.L. 102-484, Title XVII) and the 1996 enactment of the Cuban Liberty and
Democratic Solidarity Act (P.L. 104-114), often referred to as the Helms/Burton
legislation. Sanctions on financial transactions with Cuba, including those related to
travel, are set forth in the Cuban Assets Control Regulations (CACR), administered
by the Treasury Department’s Office of Foreign Assets Control (OFAC).
Cuba sanctions have been controversial in recent years. While there appears to
be broad congressional agreement on the overall objective of U.S. policy toward
Cuba—to help bring democracy and respect for human rights to the island, there are
several schools of thought on how to achieve that objective. Some advocate
maximum pressure on the Cuban government until reforms are enacted, others argue
for lifting some U.S. sanctions that they believe are hurting the Cuban people, and
still others call for a swift normalization of U.S.-Cuban relations by lifting the U.S.
embargo.
In the 108th Congress, several bills have been introduced that would lift or ease
restrictions on Cuba sanctions and as in the past several years, the House has
approved amendments to the Treasury appropriations measure to ease Cuba
sanctions. The White House has threatened to veto any legislation that weakens
economic sanctions against Cuba.
During September 9, 2003 floor consideration of H.R. 2989, the FY2004
Transportation-Treasury appropriations bill, the House approved three amendments
to ease the embargo against Cuba in various respects. The bill now has provisions
that would prevent funds from being used to administer or enforce restrictions on
travel (section 745) and remittances (section 746), and from being used to eliminate
the travel category of people-to-people educational exchanges (section 749). Similar
98 Circular A-76 is available at [www.whitehouse.gov/omb/circulars/a076/
a76_incl_tech_correction. pdf], visited Sept. 8, 2003.
99 Prepared by Mark P. Sullivan, Specialist in Latin American Affairs, Foreign Affairs,
Defense, and Trade Division.

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Cuba language is expected to be offered during Senate floor consideration of the
Senate version of the Treasury appropriations measure, S. 1589.100
H.Amdt. 375 (Flake), approved by a vote of 227-188, would prevent funds from
being used to enforce travel restrictions; its language is now section 745 of the House
bill. Restrictions on travel have been a key and often contentious component in U.S.
efforts to isolate Cuba. The embargo regulations generally have not banned travel,
but restrictions on any financial transactions have resulted in a de facto travel ban.
Certain categories of travelers may travel to Cuba under a general license, which
means that there is no need to obtain special permission from OFAC. These include
U.S. government officials, journalists, persons with close relatives in Cuba (once
every 12 months), full-time professionals for research or for professional meetings,
and amateur or semi-professional athletes participating in international competitions.
In addition, a wide variety of travelers engaging in educational, religious, and other
activities, may be eligible for specific licenses, including those visiting close relatives
more than once in a 12-month period.
Supporters of the Flake amendment argued that U.S. policy toward Cuba
abridges the rights of ordinary Americans who can travel to other countries with
communist or authoritarian governments, and that such travel by Americans can help
carry the idea of freedom to Cuba and expose Cubans to alternative information.
Opponents of the amendment argued that not enforcing the travel restrictions would
provide the Cuban government with millions of dollars in tourist receipts at the same
time when it is brutally cracking down on democracy activists, and that such travel
would not increase purposeful contact with ordinary Cubans.
H.Amdt. 377 (Delahunt), approved by a vote of 222-196, would prevent funds
from being used to enforce restrictions on remittances; its language is now section
746 of the House bill. In March 2003, OFAC had announced that the Cuba travel
regulations were being amended to allow travelers to Cuba to carry up to $3,000 in
remittances, although the limit of $300 per quarter destined for a Cuban household
remains. Supporters of the Delahunt amendment argued that there should be no limit
on the amount of financial support that Cuban Americans can send their families in
Cuba, while opponents argued that lifting the cap on remittances would mean that
more money would go to the Cuban regime through government-owned dollar stores
that have inflated prices.
H.Amdt. 382 (Davis), approved by a vote of 246-173, would prohibit funds
from being used to eliminate the travel category of people-to-people educational
exchanges; its language is now section 749 of the House bill. In March 2003, OFAC
announced that the Cuba travel regulations were being tightened for certain types of
educational travel. People-to-people educational exchanges unrelated to academic
coursework would no longer be allowed under the regulations. Some groups lauded
the restriction of these educational exchanges because they believed they had become
an opportunity for unrestricted travel; others criticized the Administration’s decision
100 “Travel, Remittances Clear House Last Night, But Sanctions Opponents Lose Dozens
of Votes; Sanctions Supporters Say Momentum for Easing Embargo is Gone,” Cuba Trader,
September 10, 2003

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to restrict a category of travel to Cuba in which ordinary people were able to travel
and exchange with their counterparts on the island.
Cuba’s human rights crackdown in 2003 has had an impact on momentum
behind legislative proposals to ease U.S. sanctions policy toward Cuba. For example,
the House-approved Cuba amendments to H.R. 2989 were approved with less
support than similar amendments in 2002. While the Flake amendment to H.R. 2989
described above was approved by a vote of 227-188, a similar Flake amendment to
the FY2003 Treasury Department appropriations bill had been approved by a vote of
262-167.
For further information, see the entry on “Cuba Sanctions” in the CRS Trade
Electronic Briefing Book; CRS Report Rl31740, Cuba: Issues for the 108th Congress;
and CRS Report RL31139, Cuba: U.S. Restrictions on Travel and Legislative
Initiatives.

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List of Transportation Acronyms
ARC: Amtrak Reform Council
AIP: Airport Improvement Program (FAA)
AIR21: the Wendell H. Ford Aviation Investment and Reform Act for the 21st
Century (P.L. 106-181), the current aviation authorizing legislation
ARAA: the Amtrak Reform and Accountability Act of 1997 (P.L. 105-134), the
current Amtrak authorizing legislation
ATSA: the Aviation and Transportation Security Act (P.L. 107-71), legislation which
created the Transportation Security Administration within the DOT
BRR: Bridge Replacement and Rehabilitation program (FHWA)
BTS: Bureau of Transportation Statistics
CG: Coast Guard
CMAQ: Congestion Mitigation and Air Quality program (FHWA)
DOT: Department of Transportation
EAS: Essential Air Service (FAA)
F&E: Facilities and Equipment program (FAA)
FAA: Federal Aviation Administration
FAHP: Federal-Aid Highway Program (FHWA)
FAIR21: the Wendell H. Ford Aviation Investment and Reform Act for the 21st
Century (P.L. 106-181), the current aviation authorizing legislation
FHWA: Federal Highway Administration
FRA: Federal Railroad Administration
FTA: Federal Transit Administration
Hazmat: Hazardous materials (safety program in RSPA)
HPP: High Priority Projects (FHWA)
HTF: Highway Trust Fund
IM: Interstate Maintenance program (FHWA)

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ITS: Intelligent Transportation Systems (FHWA)
MCSAP: Motor Carrier Safety Assistance Program (FMCSA)
New Starts: part of the FTA’s Capital Grants and Loans Program which funds new
fixed-guideway systems or extensions to existing systems
NHS: National Highway System; also a program within FHWA
NHTSA: National Highway Traffic Safety Administration
NMCSA: National Motor Carrier Safety Administration
O&M: Operations and Maintenance program (FAA)
OIG: Office of the Inspector General of the DOT
OST: Office of the Secretary of Transportation
RABA: Revenue-Aligned Budget Authority
RD&T: Research, Development and Technology program (FHWA)
RE&D: Research, Engineering and Development program (FAA)
RSPA: Research and Special Projects Administration
SCASD: Small Community Air Service Development program (FAA)
STB: Surface Transportation Board
STP: Surface Transportation Program (FHWA)
TCSP: Transportation and Community and System Preservation Program (FHWA)
TEA-21: Transportation Equity Act for the 21st Century (P.L. 105-178), the current
highway and transit authorizing legislation
TIFIA: Transportation Infrastructure Finance and Innovation Act program (FHWA)
TSA: Transportation Security Administration

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Appendix 1: The Transportation Appropriations
Framework
Transportation is function 400 in the annual unified congressional budget. It is
also considered part of the discretionary budget. Funding for the DOT budget is
derived from a number of sources. The majority of funding comes from dedicated
transportation trust funds. The remainder of DOT funding is from federal Treasury
general funds. The transportation trust funds include: the highway trust fund, which
contains two accounts, the highway trust account and the transit account; the airport
and airway trust fund; and the inland waterways trust fund. All of these accounts
derive their respective funding from specific excise and other taxes.
In FY2002 trust funds accounted for well over two-thirds of total federal
transportation spending. Together, highway and transit funding constitute the largest
component of DOT appropriations. Most highway and transit programs are funded
with contract authority derived by the link to the highway trust fund. This is very
significant from a budgeting standpoint. Contract authority is tantamount to, but
does not actually involve, entering into a contract to pay for a project at some future
date. Under this arrangement, specified in Title 23 U.S.C., authorized funds are
automatically made available at the beginning of each fiscal year and may be
obligated without appropriations legislation; although appropriations are required to
make outlays at some future date to cover these obligations.
Where most federal programs require new budget authority as part of the annual
appropriations process, transportation appropriators are faced with the opposite
situation. That is, the authority to spend for the largest programs under their control
already exists, and the mechanism to obligate funds for these programs also is in
place.
Transportation Equity Act for the 21st Century (TEA-21)
During the 105th and 106th Congresses, major legislation changed the
relationships between the largest transportation trust funds and the federal budget.
The Transportation Equity Act for the 21st Century (TEA-21) (P.L. 105-178) linked
annual spending for highway programs directly to revenue collections for the
highway trust fund. In addition, core highway and mass transit program funding was
given special status in the discretionary portion of the federal budget by virtue of the
creation of two new budget categories. The Act thereby created a virtual “firewall”
around highway and transit spending programs. The funding guarantees were set up
in a way that makes it difficult for funding levels to be altered as part of the annual
budget/appropriations process. Additional highway funds can be provided annually
by a mechanism called “Revenue Aligned Budget Authority” (RABA); RABA funds
accrue to the trust fund as a result of increased trust fund revenues. For FY2003,
however, it now appears that the RABA adjustment, if it had been left intact during
the appropriations process, would have led to a significant and unexpected drop in
the availability of highway obligational funding.
TEA-21 changed the role of the House and Senate appropriations and budget
committees in determining annual spending levels for highway and transit programs.

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The appropriations committees are precluded from their former role of setting an
annual level of obligations. These were established by TEA-21 and are adjusted by
an annual RABA computation. In addition, it appears that TEA-21 precludes, at
least in part, the House and Senate appropriations committees from exercising what
some Members view as their once traditional option of changing spending levels for
specific core programs or projects. In the FY2000 appropriations act, the
appropriators took some tentative steps to regain some of their discretion over
highway spending. The FY2000 Act called for the redistribution of some funds
among programs and added two significant spending projects. In the FY2001
appropriations act, the appropriators continued in this vein by adding funds for large
numbers of earmarked projects. Further, the FY2001 Act called for redirection of a
limited amount of funding between programs and includes significant additional
funding for some TEA-21 programs. This trend continued, and even accelerated, in
the FY2002 Act as appropriators made major redistributions of RABA funds and, in
some instances, transferred RABA funds to agencies that are not eligible for RABA
funding under TEA-21.
Wendell H. Ford Aviation Investment and Reform Act for the
21st Century (FAIR21 or AIR21)
The Wendell H. Ford Aviation Investment and Reform Act for the 21st Century
(FAIR21 or AIR21)(P.L. 106-181) provides a so-called “guarantee” for Federal
Aviation Administration (FAA) program spending. The guarantee for aviation
spending, however, is significantly different from that provided by TEA-21. Instead
of creating new budget categories, the FAIR21 guarantee rests on adoption of two
point-of-order rules for the House and the Senate. Supporters of FAIR21 believe the
new law requires significant new spending on aviation programs; and, for at least the
FY2001 and FY2002 appropriations cycles, spending grew significantly. Most
observers view the FAIR21 guarantees, however, as being somewhat weaker than
those provided by TEA-21. Congress can, and sometimes does, waive points-of-
order during consideration of legislation.
Enactment of TEA-21 and FAIR21 means that transportation appropriators have
total control over spending only for the TSA, the Coast Guard, the Federal Railroad
Administration (including Amtrak), and a number of smaller DOT agencies. All of
these agencies are concerned about their funding prospects in any year where it is
believed that there is a constrained budgetary environment.

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Appendix 2: Transportation Budget Terminology
Transportation budgeting uses a confusing lexicon (for those unfamiliar with the
process) of budget authority and contract authority — the latter, a form of budget
authority. Contract authority provides obligational authority for the funding of trust
fund-financed programs, such as the federal-aid highway program. Prior to TEA-21,
changes in spending in the annual transportation budget component had been
achieved in the appropriations process by combining changes in budget/contract
authority and placing limitations on obligations. The principal function of the
limitation on obligations is to control outlays in a manner that corresponds to
congressional budget agreements.
Contract authority is tantamount to, but does not actually involve, entering into
a contract to pay for a project at some future date. Under this arrangement, specified
in Title 23 U.S.C., which TEA-21 amended, authorized funds are automatically made
available to the states at the beginning of each fiscal year and may be obligated
without appropriations legislation. Appropriations are required to make outlays at
some future date to cover these obligations. TEA-21 greatly limited the role of the
appropriations process in core highway and transit programs because the Act
enumerated the limitation on obligations level for the period FY1999 through
FY2003 in the Statute.
Highway and transit grant programs work on a reimbursable basis: states pay
for projects up front and federal payments are made to them only when work is
completed and vouchers are presented, months or even years after the project has
begun. Work in progress is represented in the trust fund as obligated funds and
although they are considered “used” and remain as commitments against the trust
fund balances, they are not subtracted from balances.
Trust fund balances,
therefore, appear high in part because funds sufficient to cover actual and expected
future commitments must remain available.
Both the highway and transit accounts have substantial short- and long-term
commitments. These include payments that will be made in the current fiscal year
as projects are completed and, to a much greater extent, outstanding obligations to
be made at some unspecified future date. Additionally, there are unobligated
amounts that are still dedicated to highway and transit projects, but have not been
committed to specific projects.
Two terms are associated with the distribution of contract authority funds to the
states and to particular programs. The first of these, apportionments, refers to funds
distributed to the states for formula driven programs. For example, all national
highway system (NHS) funds are apportioned to the states. Allocated funds, are
funds distributed on an administrative basis, typically to programs under direct
federal control. For example, federal lands highway program monies are allocated;
the allocation can be to another federal agency, to a state, to an Indian tribe, or to
some other governmental entity. These terms do not refer to the federal budget
process, but often provide a frame of reference for highway program recipients, who
may assume, albeit incorrectly, that a state apportionment is part of the federal budget
per se

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